Blockchain Fraud Group Resurfaces, All You Need to Know

A group notorious for perpetrating blockchain fraud across platforms like Magnate, Kokomo, and Lendora has resurfaced with new fraudulent activities on Blast. Recent investigations by on-chain detective ZachXBT reveal that the group has transferred approximately $1 million in laundered funds to fuel their latest schemes.

The laundered funds originated from an Ethereum blockchain address associated with previous scams before being moved to another address on the Polygon network. Subsequently, the assets were converted into wrapped ETH (wETH) and transferred across multiple blockchain networks using bridging services like Orbiter and Bungee.

Blockchain Fraud Group Lures Victims

These funds were then utilized on the Blast platform to acquire LEAP tokens, presumably to increase liquidity and lure unsuspecting victims. Concurrently, it is suspected that the same individuals are behind another ongoing project named ZebraLending on the Base platform, which currently boasts a total value locked (TVL) of approximately $311K.

This group has a track record of launching projects that attract significant TVL before absconding with the funds. Their deceptive tactics often involve falsifying Know Your Customer (KYC) documents and collaborating with questionable auditing firms to create a facade of legitimacy.

Heightened Vigilance Within the Blockchain Space

Their fraudulent activities span across various blockchain platforms, including Base, Solana, Scroll, Optimism, Arbitrum, Ethereum, and Avalanche, demonstrating their adaptability and extensive presence in the blockchain community.

Given the recurrent nature of these scams, heightened vigilance within the blockchain community is imperative. Investors are advised to exercise caution, particularly with new initiatives on platforms like Blast involving substantial fund transfers.

Victims of Scams and Hacks

To safeguard investments, individuals should verify project qualifications, scrutinize audit reports, and understand the flow of fund transactions. Additionally, community members are urged to share information and support each other in identifying suspicious activities to prevent further victimization.

In a related incident, Munchables, a nonfungible token (NFT) game built on Blast, fell victim to a $62 million exploit on March 26. While the exploit was acknowledged, Munchables assured users that they were monitoring the exploiter’s movements and attempting to mitigate further damage.

Moreover, Blast experienced a significant outflow of approximately $400 million in Ether (ETH) from its layer-2 network shortly after the mainnet launch on Feb. 29. This incident unlocked nearly $2.3 billion in staked crypto previously locked up on the network. 

Despite surpassing $2.1 billion in TVL just days before the mainnet launch, Blast now faces scrutiny amid the fraudulent activities plaguing the platform.