Magnate Finance, a lending and borrowing platform on Coinbase’s layer-2 protocol, Base, has rug-pulled its users of $6.5 million. The rug pull occurred just hours after on-chain sleuths like ZachXBT warned about the possibility of an exit scam due to several actions of the founders of the project.
ZachXBT, a popular crypto analyst and security researcher, tweeted on August 25 that he had found “some concerning activity” on the Magnate Finance smart contract. He pointed to the fact that the contract had been renounced, meaning that the owners could no longer make changes to it. He also noted that the liquidity pool for the MAG token had been drained.
These findings were quickly followed by reports from other users that they were unable to withdraw their funds from Magnate Finance. The platform’s website and social media channels have also been taken offline.
The rug pull is a major setback for Magnate Finance, which had raised over $1 million in funding from investors. The project was marketed as a decentralized lending and borrowing platform that would allow users to earn interest on their cryptocurrency deposits.
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The rug pull is also a reminder of the risks involved in investing in cryptocurrency projects. Investors should always do their due diligence before investing in any project, and should be wary of projects that make unrealistic promises or that have a lack of transparency.
If you are a victim of a rug pull, there are a few things you can do. First, you should report the rug pull to the authorities. You can also try to recover your funds through a crypto recovery service. However, it is important to note that recovering lost funds is often difficult and time-consuming.
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