ZachXBT ties $1 million deposit on Blast to fraud group

Blockchain investigator ZachXBT has alerted the crypto community to a $1 million transfer made on the Blast network. According to the on-chain sleuth, the fund is tied to a notorious group carrying out crypto frauds across several platforms. In his post on X, he noted that the group has a history of fraud on platforms like Magnate, Kokomo, and Lendora.

ZachXBT raises alarm about Base deposit

ZachXBT said that the recent $1 million deposit made on Blast by the group is likely to aid its fraud operations on the network.

Community Alert: The group of scammers who stole 8 figs with Magnate, Kokomo, Lendora, Solfire, etc is back with a new project on Blast @Leaperfinance

Last week they funded an address on Blast with ~$1M of laundered funds from the previous rugs and have begun adding liquidity… pic.twitter.com/yqRKvZuuye

— ZachXBT (@zachxbt) April 14, 2024

In his post, he explained that the funds were sent to a polygon address from an Ethereum wallet previously flagged for blockchain fraud. Later, the funds were converted into Wrapped Ethereum (wETH) and then passed through several bridge services to move them across multiple blockchains.

The movement of the fund stopped on the Blast network as the hackers used it to purchase LEAP tokens. He noted that the purchase of the token is likely a setup for unsuspecting users as it indirectly increases the liquidity of the asset. ZachXBT also noted that this same group of fraudsters is likely responsible for the ongoing ZebraLending project which is also on the Base network. The project currently boasts a total value locked (TVL) of $311,000.

Vigilance and safety measures

The blockchain investigator pointed out that the group’s modus operandi is to launch a project on specific blockchains and abscond with the funds when the TVL reaches a certain level. The group makes their activities look legit by providing fake know-your-customer (KYC) documents and asking relatively unknown firms to help with their audits. The group has carried out its scam across several blockchains including Solana, Optimism, Ethereum, and a few others.

The pattern of these rug pulls has called for the need for increased vigilance in the blockchain ecosystem. Investors are advised to be cautious when dealing with new projects across several blockchains in the industry. Some of the steps to ensure the legitimacy of a project include checking the project qualifications and examining the audit experiences.