In a disconcerting turn of events, Magnate Finance on Base has abruptly closed its Telegram group and taken its website offline, leaving investors worried about the possibility of yet another exit scam. With a total locked value of $6.4 million, Magnate Finance has been associated with several other financial exit scams, raising concerns among the cryptocurrency community.
Renowned blockchain analyst ZachXBT has also expressed his suspicions of Magnate Finance potentially perpetrating an exit scam, pointing out that the deployer’s address is directly linked to the Solfire $4.8 million exit scam. Adding to the alarm, the analyst revealed that Magnate Finance also has on-chain ties with the Kokomo Finance exit scam.
Since the removal of its website, Magnate Finance’s token (MAG) has experienced a staggering drop of nearly 88% in value. CoinGecko data shows that within the last 24 hours, the token has plummeted over 90%. These significant losses in such a short period have further fueled suspicions of foul play.
Following ZachXBT’s public warning about the potential exit scam, Finance Magnate surprisingly replied to him, asking, “We stick to the plan? 50-50?” The situation took a more peculiar turn when Magnate Finance changed their Twitter bio to “Contract breached by Zach” and subsequently deleted their account.
Fortunately, some users were able to withdraw their funds after ZachXBT’s timely warning about the potential exit scam. Their quick action may have saved them from significant losses. Additionally, blockchain analyst Peckshield confirmed that the developer of the lending protocol on Base modified the provider of the price oracle and removed all assets, adding to the suspicious activities surrounding Magnate Finance.
The cryptocurrency industry has been plagued by scams and fraudulent activities, particularly in the realm of Web3 and DeFi platforms. ZachXBT previously brought attention to the alarming financial damage caused by SIM swap attacks, which alone reached over $13.3 million in the past four months. Furthermore, bridge exploits in the DeFi ecosystem have resulted in an astonishing loss of $207 million during just the first half of this year.
According to a report released by web 3.0 security firm Beosin on June 30, 2023, the total value of cryptocurrencies lost due to exit scams and hacks amounted to a staggering $656 million in the first half of the year. The continuous rise in crypto scams not only paves the way for financial losses but also provides regulators with ammunition to enforce stricter regulations on the entire cryptocurrency industry.
The sudden disappearance of Magnate Finance, along with its ties to previous exit scams, has once again shone a spotlight on the persistent issue of fraudulent activities in the crypto industry. As investors seek to navigate this risky landscape, it is crucial to remain vigilant and conduct thorough research to mitigate the risks associated with potential scams. Additionally, industry stakeholders must continue to work towards establishing robust security measures and regulatory frameworks to protect users and foster trust within the cryptocurrency ecosystem.