Blockchain investigator ZachXBT has issued a stark warning about a group of scammers who are attempting to ensnare more victims in a new fraud scheme involving millions of stolen funds.
In a detailed post on X, ZachXBT revealed the results of an extensive investigation into Leaper Finance, a lending protocol built on the Blast platform. The analysis uncovered that this group is responsible for a series of rug pulls, including those that impacted users of Magnate ($6.5 million), Kokomo ($4 million), Solfire ($4.8 million), and Lendora.
ZachXBT noted, “In the past, they allowed the Total Value Locked (TVL) to grow into seven figures before absconding with all the funds deposited in the protocol. They also falsified Know Your Customer (KYC) documents and utilized lower-tier audit firms. Now, they have expanded their scams to Base, Solana, Scroll, Optimism, Arbitrum, Ethereum, Avalanche, and more.”
Moreover, the group is believed to be behind scams involving Hash DAO, Glori Finance, and ZebraDAO. The estimated losses associated with this group exceed $20 million.
As illustrated in the accompanying image, a rug pull occurs when the developers of a blockchain-based protocol abruptly withdraw all their funds from a liquidity pool or project wallet, effectively draining the investments made by others. This happens without any prior warning, leaving investors with worthless tokens or assets.
In this latest fraudulent scheme, the group reportedly transferred almost $1 million, which had been laundered from previous scams, to a Leaper Finance address on the Blast network. This injection of liquidity was intended to attract unsuspecting victims.
Shortly after the connection between Leaper Finance and the scams was exposed, the group responded to ZachXBT’s findings by harassing him and announcing a “token launch.” They even referenced the notorious North Korean hacker group, Lazarus, stating, “Nice work! My comrades here at Lazarus fear you yet admire you!” Both the Leaper Finance and Glori Finance accounts on X have since been deactivated, and the websites for these projects have gone offline.
According to a research report released on February 29 by blockchain security firm Immunefi, a staggering $200 million worth of cryptocurrency was lost to hacks and rug pulls in the first two months of 2024, across 32 separate incidents.
In conclusion, it is crucial to be aware of the risks involved when investing in Solana memecoins. As highlighted in the accompanying image, there are five dangers that potential investors should be cautious of when entering this market.