Million-Dollar Scam: Magnate Finance Tied to Controversial Solfire and Kokomo Projects


On-chain sleuths have linked the deployer address of Magnate Finance, a DeFi protocol on Base, to two previous rug pulls amounting to a total of $16.7 million. This is according to BeosinAlert, a Web3 real-time risk alert platform, who tweeted on Friday that the scammers had made a profit of $16.7 million from the three rug pulls.

The $6.5 million Magnate Finance rug pull was preceded by the $4.8 million Solfire scam in January 2022 and the $5.5 million Kokomo Finance rug pull in March 2023. Magnate Finance was a lending and borrowing protocol on Base, a layer-2 platform developed by Coinbase. Concerns about a potential exit scam by the protocol’s team were noted by on-chain sleuth ZachXBT, who alerted the crypto community to the suspicious activities, including the abrupt deletion of the group’s Telegram and X accounts and the taking offline of their website.

The latest rug-pull adds to a string of attacks that have hit the DeFi ecosystem. Blockchain security reports have noted that the first six months of the year accounted for nearly $656 million worth of assets lost to hacks, phishing scams and rug pulls. Beosin has narrowed this down to 108 attacks involving roughly $471 million, with phishing scams and 110 rug pulls seeing a total of $108 million and $76 million lost in H1, 2023. In some cases, the money has been recovered, such as Euler Finance’s $197 million.

Cryptocurrency users are urged to remain vigilant and aware of the risks that come with investing in DeFi protocols.

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