Crypto scam ring exposed: Investors lose over $200M

This scam alert was shared by a pseudonymous blockchain examiner, ZachXBT, who noticed that the same group of scammers had attempted to scam more people into transferring more than $30 million worth of digital assets.

Scam operations uncovered

The tweet on X  by ZachXBT pointed out the conclusion of an investigation about a protocol Lending, which was based on Blast as its basis. After running a series of checks, the team found that the group was behind scams which resulted to users of Kokomo, Magnate and Solfire losing $4 million, $6.5 million, and $4.8 million respectively.

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

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

— ZachXBT (@zachxbt) April 14, 2024

According to ZachXBT previously TVL was run into six figures and all the fund deposited in the protocol was taken . That’s not all. KYC documents were compromised, including those of lower rated audit firms. A repetition of the same Scam has been recorded on BASE, Solana, Scroll, Optimism, Arbitrum, Ethereum, Avalanche and other protocols.

The same group is also known to have performed rats on Hash DAO, Glori Finance and ZebraDAO. It is believed that losses incurred are more than $20 million in total. The transfer of value is usually contracted with professional service of legitimizing the platform, which received substantial funding from its investors. This occurrence is usually without any warning and the moment investors realize what has happened their tokens or assets are worthless. 

Impact on investors

The recent scam project that their group is involved in saw the saltrify Finance address on the Blast network being fed with approximately 1 million dollars which were obtained from the previous scams and which aims to provide additional liquidity to attract victims.

Only days after the analyst linked Leaper Finance with the scams, the group communicated and sent messages to ZachXBT, threatening ZachXBT while announcing there would be a ‘token launch’.

“Cheers fellow members of the Lazarus Crew. They fear and love you at the same time,” they said thanking the defender with regards to the North Korean hacker group Lazarus. Leaper Finance and Glori Finance accounts on X have been deactivated and the landing pages are popping up an error. Over 200M was lost to hacks and rug pulls within the first two months of 2024 across 32 individual incidents.