Three cryptocurrency projects vanished from the internet mere hours after blockchain investigator ZachXBT traced their liquidity to funds pilfered by previous hackers. On April 14, ZachXBT unearthed a wallet address harboring stolen assets that were being used to provide liquidity to three newly emerged crypto ventures: Leaper Finance, a lending protocol on Blast (1,800 followers on X), Base Zebra DAO (3,200 followers), and Glori Finance on Arbitrum (3,200 followers).
Further probing uncovered that the wallet in question had previously bankrolled a rug pull scheme and was currently fueling liquidity for multiple projects across various blockchains, including Base, Solana, Scroll, Optimism, Arbitrum, Ethereum, and Avalanche. Shortly after being flagged by ZachXBT, the websites and social media profiles of these projects were wiped out and remained dormant. Notably, the fraudsters managing Leaper Finance's social media accounts acknowledged ZachXBT's prowess in identifying sham projects.
In a peculiar turn, the individuals behind the Leaper Finance social media accounts commended ZachXBT's investigative skills, stating, "Well done! My comrades at Lazarus both fear and admire you!" before swiftly deleting the account. They even extended offers for partnerships in launching new fraudulent tokens. According to ZachXBT, these scammers had previously absconded with millions of dollars in cryptocurrency from projects such as Magnate Finance, Kokomo Finance, Lendora, and Solfire.
This pattern suggests a disturbing trend where stolen funds are repurposed to create deceptive cryptocurrency projects aimed at ensnaring unsuspecting investors. As a precautionary measure, investors are urged to conduct thorough due diligence on crypto projects before committing funds, including scrutinizing founders and teams and verifying the authenticity of audit reports.
In a concerning development, Ethereum layer 2 protocol Base witnessed an 18x surge in cryptocurrency funds siphoned through phishing scams in March compared to January. According to blockchain anti-fraud platform Scam Sniffer, phishing scammers pilfered approximately $3.35 million from Base users in March alone. Scam Sniffer predicts an uptick in phishing attacks on Base in April as the platform's asset diversity and user activity continue to expand.
The rise in Base phishing scams coincides with a recent frenzy for meme coins on Coinbase-backed chains, contributing to Base's total locked value surpassing $3.2 billion, marking a $370 million increase thus far in 2024.
