• Magnet Finance orchestrated a $6.5 million exit scam on Base L2 using price oracle manipulation.
• The deployer’s address matched that of the Solfire exit scam, leading to an 86% drop in the MAG token.
• Crypto scams have caused more than $13.3 million in financial damage in the past four months alone.
Magnate Finance Orchestrates $6.4m Exit Scam on Base L2
Coinbase’s Base L2 network faces a new setback as Magnate Finance orchestrates a $6.5 million exit scam using price oracle manipulation. On Aug. 25, ZachXBT sent out a community alert through X (previously known as Twitter) cautioning them about the potential scam, and within an hour of the warning, Magnate Finance’s website went offline and its Telegram group was deleted leading to a loss of user funds attributed to the deployer’s manipulation of the price oracle.
Investigations Reveal Connections Between Deployer & Previous Exit Scams
ZachXBT’s investigation revealed connections between the deployer of Magnate Finance and previous exit scams such as Kokomo Finance which stole $4 million in user funds on Mar 27th. Further inquiry by ZachXBT identified that Magnate Finance’s deployer’s address matched that of the Solfire exit scam, which was corroborated by blockchain security firm SlowMist. At present time, approximately $2.8 million in crypto assets remain locked in Magnate’s protocol according to DeFiLlama reports
Price Oracle Manipulation Causes 86% Drop in MAG Token Price
Blockchain security firm PeckShield has explained the price oracle manipulation which led to an 86% drop in the price of Magnate Finance’s MAG token with their tweet: #PeckShieldAlert #rugpull Magnate Finance $MAG has dropped -86%.
Crypto Scams Continue To Cause Financial Damage In The Industry
Crypto scams persist as a recurring issue in the industry with SIM swap attacks causing more than $13.3 million dollars worth of financial damage over four months according to ZachXBT’s report from August 23rd .
Despite warnings from experts like ZachXBT and blockchain security firms like PeckShield and SlowMist , crypto users are still susceptible to these types of scams . It is important for crypto users to take extra precautions when using Web3 and DeFi platforms .