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$6.4M Stolen as Magnate Finance Rug Pulls Its Users Despite the Raised Warnings

$6.4M Stolen as Magnate Finance Rug Pulls Its Users Despite the Raised Warnings

Lending platform Magnate Finance pulled the plug on $6.4m worth of TVL.

Magnate Finance, a lending protocol on Base, had rug pulled its users of $6.4m and drained the customer accounts.

On August 25th, a user on X (formerly Twitter) warned of suspicious activity related to the lending platform, stating it’s probably preparing to scam people. Shortly after, Magnate Finance performed a rug pull by directly manipulating the price oracle.

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The initial X post reported that after the warning, Magnate Finance deleted its X account and Telegram group. The official website was also taken offline.

According to PeckShield's investigation, “the developer modified the provider of the price oracle and removed all the assets.”

Reportedly, the scammer transferred $1.34m worth of Dai, a stable, decentralized currency, to a new address. And then moved $1m to BNB Chain. PeckShield found out there are at least 5 other wallets used by the scammer to appropriate customer funds.

According to DefiLlama, Magnate Finance’s total value locked (TVL) has been steadily rising since August 13th, until the scam concluded.

The protocol was built on the Base chain, a secure and low-cost Ethereum L2. Recently, Base announced its commitment to the development of Superchain.

The original X poster, who alerted the public of the scam, also had drawn a connection between this scam and the one involving Solfire that saw the appropriation of $4.8m.

Solfire executed its rug pull in January 2022, when scammers bridged over $3m to Ethereum.

Rug pulls are becoming increasingly notorious, reportedly taking advantage of decentralization. In May alone, $45m were stolen from users using rug pull scams.

Aaron S., Editor-In-Chief
Having completed a Master’s degree on Economics, Politics & Culture for the East Asia region, Aaron has written scientific papers with a comparative analysis of the differences between US’ Western and Japan’s Collective forms of capitalism, 1945-2020.
With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.
Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.
Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.



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