Scammers Funnel Stolen Crypto via new Projects

Blockchain investigator ZachXBT has discovered that scammers funnel stolen funds into fake projects across multiple blockchains, only to vanish into thin air shortly after.

In a recent investigation, ZachXBT identified several projects, notably Zebra DAO, Leaper Finance, and Glori Finance, all propped up by liquidity from previous hacks. Within hours of ZachXBT’s revelation, the implicated projects swiftly deleted their online presence, leaving investors in the dark and their funds at risk.

Update: Scammer started trolling before deactivating both Leaper Finance & Glori Finance X accounts.

All three websites for the projects mentioned are now offline as well. pic.twitter.com/Az1TLZDmMq

— ZachXBT (@zachxbt) April 14, 2024

A Pattern Of Fraudulent Activity

The wallet address traced by ZachXBT had previously funded rug pull schemes, indicating a pattern of fraudulent activity spanning various blockchain networks such as Solana, Base, Scroll, Arbitrum, Optimism, Avalanche, and Ethereum.

The Leaper Finance social media account commended ZachXBT’s efforts in a now-deleted message. However, it extended an auspicious offer for collaboration on a new scam token launch—a testament to the audacity of crypto fraudsters in the face of scrutiny.

ZachXBT’s investigation linked the perpetrators to previous heists on projects like Lendora, Kokomo Finance, Magnate Finance, and Solfire. The recycled nature of stolen funds highlights a worrying trend where ill-gotten gains are reinvested to fuel new scams, perpetuating a cycle of deceit and financial loss for unsuspecting investors. ZachXBT has established a reputation for revealing facts about scams and rug pulls of crypto projects, most recently, the hack of Cointelegraph’s X account.

Crypto Investor Must Be Cautious

Meanwhile, Ethereum’s Base protocol has become a hotspot for phishing scams, with $3.35 million stolen from unsuspecting victims in March alone per Scam Sniffer, a blockchain anti-scam platform. It anticipates a surge in phishing attacks on Base in the coming months, fueled by the platform’s growing user base and asset diversity.

[1/7] ScamSniffer’s March Phishing Report
Crypto phishing scams hit $71M in March, marking a 50% increase in stolen funds from February.
The first quarter of 2024 has seen a total of $173M lost to phishing scams. pic.twitter.com/Z40WHJRYv4

— Scam Sniffer | Web3 Anti-Scam (@realScamSniffer) April 2, 2024

The rise in Base phishing incidents coincides with a memecoin frenzy on the Coinbase-backed chain. This frenzy has propelled the platform’s total value locked to over $3.2 billion, a 370% surge since the beginning of 2024, as reported by the on-chain analytics platform — L2Beat.

However, this meteoric rise in value has also attracted the attention of fraudsters keen on exploiting the platform’s popularity for nefarious purposes. In light of these developments, investors must exercise caution and conduct thorough due diligence before committing funds to any crypto project.

Background checks on project founders and teams, alongside validation of audit reports, are essential steps to mitigate the risks associated with fraudulent schemes. Last October, a Hacken study showed that non-audited crypto projects are usually rug pulls.