Lending Protocol on Coinbase_s Base Pulls the Rug on Users: Report

Just an hour after popular crypto on-chain sleuth, ZachXBT, alerted the community of a potential scam masquerading as a legitimate lending protocol called Magnate Finance on the Base blockchain, the platform pulled the rug on its users.

Magnate’s deployer address was found to have links to two DeFi projects that turned out to be exit scams.

• According to the latest update, Magnate Finance’s website is now offline while its Telegram group was deleted.
• The analyst revealed that the deployer’s address is directly linked to the Solfire $4.8 million exit scams.
• ZachXBT also identified links between the deployer of the project and the Optimism chain-based Kokomo Finance exit scam, which pilfered $4 million in user funds earlier in March this year.
• In a bizarre turn of events, before going offline, Magnate Finance purportedly replied to ZachXBT’s thread saying, “We stick to the plan? 50-50?” and even changed their bio to “Contract breached by Zach.”
• The project’s TVL surged to $6.4 million on August 25th before plummeting to zero, according to DefiLlama.
• Blockchain security platform, PeckShield, explained that the developer modified the provider of the price oracle and removed all the assets.
• The community contributor for PeckShield also detected that the perpetrator had bridged nearly $1 million of the stolen funds to the BNBChain.
• Since its mainnet release on August 9th, the Coinbase Layer 2 Base blockchain has experienced a string of rug pulls and exit scams within the projects deployed on its platform.
• A New York-based crypto market integrity platform Solidus Labs recently reported the existence of more than 500 scam tokens on Base.