Three cryptocurrency projects vanished from the internet just hours after blockchain investigator ZachXBT traced their liquidity back to stolen funds from previous hacks.
On April 14, ZachXBT identified a wallet address that was holding the stolen funds and providing liquidity to three new crypto projects. These projects were Leaper Finance on the Blast platform, which had 1,800 followers, Zebra DAO on Base with 3,200 followers, and Glori Finance on Arbitrum with 3,200 followers.
Further investigations revealed that the wallet had previously been used to fund a rug pull project and was currently supplying liquidity funds to various projects across multiple blockchains, including Base, Solana, Scroll, Optimism, Arbitrum, Ethereum, and Avalanche.
Shortly after being exposed on X, the projects’ websites and social media accounts were deleted and remain inactive. However, the person behind the Leaper Finance social media account acknowledged ZachXBT’s ability to trace fraudulent projects.
Before deleting the account, the scammers said, “Nice work! My comrades here at Lazarus fear you yet admire you!” They also offered a partnership for a new scam token launch.
According to ZachXBT, these scammers are responsible for stealing millions of dollars’ worth of cryptocurrency from projects like Magnate Finance, Kokomo Finance, Lendora, and Solfire, among others.
This trend indicates that the stolen funds are being used to create scam crypto projects, which are designed to deceive unsuspecting investors with rug pull or exit scams.
Investors are advised to thoroughly research cryptocurrency projects before investing. This includes conducting background checks on the founders and team members and verifying the legitimacy of the audit report.
In related news, Ethereum layer-2 protocol Base experienced an 18-fold increase in cryptocurrency funds stolen from phishing scams in March compared to January. Scam Sniffer, a blockchain anti-scam platform, reported that approximately $3.35 million was stolen from phishing scammers on Base in March alone.
Scam Sniffer predicts that there will be even more phishing attacks on Base in April as the number of assets and active users on the platform continues to grow.
The rise in Base phishing scams coincides with the recent popularity of memecoins on the Coinbase-backed chain. According to L2Beat, this has contributed to Base’s total value locked surpassing $3.2 billion, marking a 370% increase so far in 2024.