Magnate Finance, once a top-performing cryptocurrency platform boasting a Total Value Locked (TVL) of $6.4 million on Base, is now under investigation amid claims of an exit scam. These allegations have been verified by PeckShield.
Doubts arose following insights from on-chain analyst ZachXBT, who pointed out possible warning signs. A significant point of alarm was the finding that Magnate Finance’s deployer address was directly associated with a $4.8 million rug pull carried out by a project called Solfire in January 2022.
Prior to these events, CertiK Alert observed that Magnate Finance’s website and associated social media channels went offline suddenly right after ZachXBT shared his suspicions regarding the platform. CertiK then tweeted, “We are seeing a #slippage on Magnate Finance of 89%.”
In-depth analyses from CertiK indicate that manipulative methods were used. It’s believed that the deployer account manipulated the price oracle provider. This suspected maneuver likely allowed the extraction of $5.3 million in liquidity by employing fake collateral.
BaseScan further disclosed significant assets absent from Magnate Finance amounting to its $6.4 million TVL: $2 million in USDbC, $1.56 million in ETH, $1.3 million in DAI, and $408,000 in WETH.
Following the direct association with this potential illicit activity on ZachXBT’s thread, Magnate Finance’s website went offline. Additionally, its Telegram group disappeared, leaving no trace in the digital realm. Strikingly, they updated their Twitter bio to read, “Contract breached by Zach.”