Millions Lost As Magnate Finance Initiates Rug Pull

Magnate Finance, a popular lending company operating on the Ethereum Layer 2 network Base, appears to have conducted an exit scam, absconding with approximately $6.4 million.

Security firm PeckShield labeled this event as a rug pull, a phrase denoting crypto developers deceitfully vanishing with the deposited funds of the users. The investigation conducted by PeckShield revealed that Magnate Finance manipulated the price oracle used by the lending platform to drain all user deposits.

Since then, the Magnate Finance team has completely wiped out its online presence, erasing social media accounts on platforms like X and Telegram, and rendering the official website inaccessible. The exit scam was exposed following a warning issues by on-chain analyst ZachXBT after they raised concerns about the potential for an exit scam involving Magnate Finance on Base.

This suspicion emerged via the discovery that the deployer address for Magnate Finance was directly linked to a previous exit scam related to a project called Solfire, which had defrauded $4.8 million.

August has been a troublesome month for Base, as this incident marks the second rug pull observed within the month. Earlier in August, SwirlLend similarly disappeared with $460,000 in an exit scam on Base, with additional funds being stolen on Linea as well.