Magnate Finance disappears with over $6 million in apparent 'rug pull'

Quick Take

  • Magnate Finance has seemingly executed an exit scam, making off with $6.4 million.
  • Security firm PeckShield described the act as a rug pull — a fraudulent practice involving the taking of user funds.

Magnate Finance, a lending project operating on Ethereum Layer 2 network Base, has seemingly carried out an exit scam — making off with an estimated $6.4 million. 

Security firm PeckShield described the event as a rug pull — a term used to refer to crypto developers fraudulently running away with user-deposited funds. It found that Magnate Finance had manually modified the price oracle used by the lending protocol to drain all of the user deposits.

The team has effectively cleared out all of its digital presence. Its social media accounts on platforms such as Twitter and Telegram have been deleted, and the official website is currently unreachable.

ZachXBT warned Magnate Finance could exit scam

The exit scam came to light after a warning by on-chain analyst ZachXBT earlier today. The sleuth had cautioned that Magnate Finance on Base could likely carry out an exit scam. They arrived at this conclusion after discovering that Magnate Finance's deployer address was directly linked to a previous exit scam involving a project called Solfire, where $4.8 million was defrauded.

August has been a troubling month for Base. This incident marks the second rug pull seen this month. Earlier in August, SwirlLend disappeared with $460,000 in an exit scam executed on Base — with some funds also stolen on Linea.

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