Web3 game project with actors of $1.6 million exit fraud
The development team behind the FinSol gaming project has been accused of massive exit fraud, defrauding investors of $1.6 million in market manipulation.
According to a recent report from blockchain security platform CertiK, Finsol Group raised funds by hiring paid actors as executives and developing a gaming platform.
However, instead of fulfilling the promise, the group is said to have diverted the money to themselves, leaving investors empty-handed.
The alleged withdrawal fraud involved the transfer of $1.6 million in Bridged Tether (USDT) from investors to Finsol Group.
To obscure the origin of the money, the developers are said to have siphoned the money through a cryptocurrency mixer called Tornado Cash.
What makes this case even more troubling is that this is not the first time Finsol developers have been accused of ethical wrongdoing.
Earlier this year, decentralized finance (DeFi) project FinTech said it adopted advanced technology to develop the FinSol Metaverse platform.
The announcement boasted of using modern technologies like Unreal Engine 5 and Cocos 2D to create different gaming experiences.
However, it was found out that the fintech Defi project itself stole $31.6 million and embezzled the money on the Tron blockchain.
Responding to these allegations, Certike said Finsol Group had rebranded as “Standard Cross Finance (SCF)” in August.
The Securities Forum has provided evidence that the CEOs of Fintech and Standard Cross Finance are the same individuals.
These so-called executives, including the CEO, CFO, and COO, were found to be entertainment industry actors.
The project's chief technology officer was even featured on an advertising poster for the entertainment company.
Despite the tarnished name, the rebranded Standard Cross Finance team continued to promote Finsol on platforms such as YouTube and Telegram.
They showed a video called “R&D Headquarters” and organized a promotional event in Vietnam to further entice investors.
Blockchain data reveals Finsol's market manipulation
According to blockchain data, on October 10, the FinSoul project generated 100 million FinSoul (FSL) tokens and deployed its token contract on the BNB Smart Chain network.
The recruiter's account transferred a portion of the tokens to other accounts, eventually holding 97 million FSL tokens.
One of the transfers involves creating a liquidity pool for FSL on PancakeSwap, a decentralized exchange.
FSL's initial trading started at $0.3911 per token, and within hours, the price rose to $17.5774 before settling around $5.
However, between 4:30 PM and 5:00 PM UTC, the price suddenly dropped to zero.
This price drop coincided with two significant events: the relocation of the remaining 97 million FSL tokens and the sale of the entire token supply to a liquid pool, leading to the outflow of $1.6 million worth of Binance-pegged USDT from the pool.
Despite the alleged fraud, the Standard Cross Finance team was able to convince investors to reinvest in their project.
They have relaunched FSL with a new token contract, which currently holds a price of $1.29 per coin.
