Three cryptocurrency projects vanished from the internet just hours after blockchain investigator ZachXBT discovered that their liquidity was sourced from funds stolen in previous hacks.
On April 14, ZachXBT identified a wallet address that held the stolen funds and was providing liquidity to three new crypto projects. These projects included Leaper Finance, a lending protocol with 1,800 followers on Blast, Zebra DAO with 3,200 followers on Base, and Glori Finance with 3,200 followers on Arbitrum.
Further investigation revealed that the same wallet had previously funded a rug pull project and was currently supplying liquidity to various projects across different blockchains, including Base, Solana, Scroll, Optimism, Arbitrum, Ethereum, and Avalanche.
Following the exposure on X, the projects’ websites and social media accounts were promptly deleted and remain inactive. However, the scammer behind the Leaper Finance social media account acknowledged ZachXBT’s ability to trace fraudulent projects.
Just before deleting the account, the scammers expressed admiration for ZachXBT’s work and 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 pattern indicates that the stolen funds are being repurposed to create scam crypto projects, specifically designed to deceive unsuspecting investors through rug pulls or exit scams.
Investors are strongly advised to conduct thorough research on crypto projects before investing. This includes background checks on the founders and team members, as well as verifying the legitimacy of the audit report.
In related news, a recent report revealed that 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 more phishing attacks on Base in April as the number of assets and active users on the platform continues to grow.
The surge in Base phishing scams coincides with the recent memecoin craze on the Coinbase-backed chain. L2Beat data shows that Base’s total value locked has exceeded $3.2 billion, marking a 370% increase since the beginning of 2024.
Magazine: Altseason on the horizon, SEC targets Uniswap, and BTC halving news: Hodler’s Digest, April 7–13.