Magnate Finance on Base has recently taken its website offline and deleted its Telegram group, raising suspicions of yet another exit scam. This move has left investors worried about the safety of their funds, as Magnate Finance is known to have connections with other financial exit scams.
Blockchain analyst ZachXBT has cautioned about the likelihood of an exit scam by Magnate Finance, pointing out that the deployer’s address is directly linked to the Solfire $4.8 million exit scam. Additionally, the analyst has revealed that Magnate Finance has on-chain ties with the Kokomo Finance exit scam. These connections only deepen concerns about the legitimacy of Magnate Finance.
Since the website of Magnate Finance went offline, its token (MAG) has experienced a drastic decline in value. CoinGecko data shows that the token has plummeted nearly 88%, with a staggering 90% drop in the last 24 hours. This dramatic decrease in value further exacerbates the worries of investors who fear losing their investments.
After ZachXBT warned about the potential exit scam on social media platform X, formerly Twitter, Finance Magnate responded with a cryptic message: “We stick to the plan? 50-50?” and changed their X bio to state “Contract breached by Zach.” This response, along with the deletion of their X account, adds fuel to speculations about the integrity of Magnate Finance.
Fortunately, some users managed to withdraw their funds after ZachXBT alerted them to the potential exit scam. Another blockchain analyst, Peckshield, confirmed that the developer of the lending protocol on Base modified the provider of the price oracle and removed all the assets. These actions highlight the chaotic nature of the situation and further undermine confidence in Magnate Finance.
Unfortunately, crypto scams within the Web3 and DeFi platforms continue to plague the industry. ZachXBT previously disclosed that the financial damage caused by SIM swap attacks alone in the last four months exceeded $13.3 million. Additionally, bridge exploits in the DeFi ecosystem resulted in a loss of $207 million in just the first half of this year.
According to a recent report by web 3.0 security firm Beosin, the total value of cryptocurrencies lost in exit scams and hacks amounted to a staggering $656 million in the first half of 2023. This continued rise in crypto scams poses a significant threat to the industry, as it increases the likelihood of regulators imposing stricter regulations on the entire crypto industry.
The abrupt deletion of Magnate Finance’s Telegram group and the offline status of its website have triggered concerns over a potential exit scam. With ties to previous exit scams and a significant decline in token value, investors are left apprehensive about the safety of their funds. The unsettling response to warnings and actions taken by the developer further contribute to the skepticism surrounding Magnate Finance. The prevalence of crypto scams within the industry only serves to harm the overall reputation of cryptocurrencies, making it easier for regulators to impose stricter regulations. It is crucial for investors to exercise caution and conduct thorough research before getting involved in any crypto-related ventures to mitigate the risks associated with scams and fraudulent activities.
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