Crypto sleuth warns of fraudsters behind the DeFi protocol

Crypto Sleuth Warns Of Fraudsters Behind The Defi Protocol

Anonymous blockchain investigator ZachXBT has warned of a group of fraudsters using millions of stolen funds to implicate more victims in a new scam.

On X (formerly Twitter), ZachXBT disclosed the findings of an investigation into Leaper Finance, a lending protocol based on Blast. According to the analysis, the group is behind a number of rogue exploits, including Magnet ($6.5 million), Kokomo ($4 million), Soulfire ($4.8 million), and Landora users.

“Before stealing all user funds deposited into the protocol in the past, let TVL grow to 7 figs and use KYC documents + low audit firms. Now they have started cheating on Base, Solana, Scroll, Optimism, Arbitrum, Ethereum, Avalanche, etc.,” said ZackXBT .

The group is also believed to be responsible for frauds against Hash DAO, Glori Finance and ZebraDAO. Losses incurred by the group are estimated at more than 20 million dollars.

Source: Leaper Finance

Carpet dragging occurs when developers of a blockchain-based protocol suddenly withdraw funds from a liquidity pool or project wallet, depleting the funds invested by others. This often happens without warning, leaving investors with worthless tokens or assets.

As part of the latest scam, the group reportedly transferred nearly $1 million from previous scams to a Lipper Financial address on the Blast network.

Shortly after Leper Finance's connection to scams was revealed, the group responded to ZachXBT, announcing the investigator's ‘token launch'.

“Good job! My friends at Lazarus are here to scare you and admire you!” he said, referring to the North Korean hacking group Lazarus.Leaper Finance and Glory Financial accounts on X have been deactivated, and the projects' websites have gone dark.

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Source: ZachXBT

In the year According to a February 29 research report by blockchain security firm ImmuneFi, more than $200 million worth of cryptocurrency was lost in 32 separate instances of hacking and carpet dragging in the first two months of 2024.

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