ZachXBT Exposes Rug Pull Syndicate Targeting Crypto Community
A series of rug pulls, including Magnate, Kokomo, Solfire, and Lendora, have been orchestrated by a single group, according to on-chain detective ZachXBT.
ZachXBT Exposes Rug Pull Syndicate Targeting Crypto Community
Fraudulent Group Uncovered
Community Alert: The group of scammers who stole 8 figs with Magnate, Kokomo, Lendora, Solfire, etc is back with a new project on Blast @Leaperfinance
— ZachXBT (@zachxbt) April 14, 2024
Last week they funded an address on Blast with ~$1M of laundered funds from the previous rugs and have begun adding liquidity… pic.twitter.com/yqRKvZuuye
On the morning of April 14, on-chain detective ZachXBT exposed a group of scammers who have been orchestrating rug pulls and stealing millions of dollars.
In a series of posts on X, ZachXBT revealed his investigation into Leaper Finance, a lending protocol on the Blast network. According to his analysis, the group behind this project is also responsible for recent rug pulls, including Magnate ($6.5 million), Kokomo ($4 million), Solfire ($4.8 million), Glori Finance, and Lendora.
ZachXBT stated:
"This group often fabricates KYC documents and uses low-tier audit firms, waiting until TVL hits seven figures before absconding with the funds. They have executed scams across multiple blockchains including Base, Solana, Scroll, Optimism, Arbitrum, Ethereum, and Avalanche."
The group has also been linked to frauds involving Hash DAO, Glori Finance, and ZebraDAO. Total estimated losses are over $20 million.
In a recent move, the criminals reinvested nearly $1 million (from previous scams) into a Leaper Finance wallet to boost liquidity and attract more victims.
Criminal Group’s Response
After the connection between Leaper Finance and other scams was revealed, the criminals brazenly announced an upcoming token launch. They taunted ZachXBT with:
"Well done, mate! My colleagues at Lazarus are both scared and admire you.”
This statement hinted at a possible connection to the notorious North Korean hacker group Lazarus. The X account and website of Leaper Finance and Glori Finance have since been disabled and scrubbed clean.
Understanding Rug Pulls
Update: Same group of scammers is also behind @Glori_Finance on Arbitrum which currently has $1.4M TVL
— ZachXBT (@zachxbt) April 14, 2024
All three of the scam projects mentioned in this post are Compound V2 forks.
If you look at the top GLORI holders they added liquidity with funds from the Crolend/HashDAO/… pic.twitter.com/JT7UJo54Lx
A rug pull is a type of fraud in the crypto space where developers abandon a project and sell or withdraw all liquidity. The term originates from the phrase "pull the rug out from under (someone)," meaning to unexpectedly withdraw support.
Another prevalent scam is presales, where projects solicit funds to a designated wallet address and then disappear without distributing tokens. According to Blockaid, 50% of presales on Solana are scams.
Recent research from blockchain security firm Immunefi indicates that the crypto industry lost over $336 million to attacks in Q1 2024.
