Blockchain Fraudsters Target New Victims with Blast Scams, Laundering Millions

A group with a history of blockchain fraud on platforms like Magnate, Kokomo, and Lendora has been identified moving $1 million in laundered funds to finance fraudulent activities on the Blast platform. The funds were initially moved from an Ethereum address linked to previous scams to another address on the Polygon network and later converted into Wrapped ETH (wETH) and moved across multiple blockchain networks before being used on the Blast platform to purchase LEAP tokens.

Blockchain Fraudsters Launch New Scams on Blast, Laundering Millions

A notorious group responsible for a string of blockchain frauds on platforms such as Magnate, Kokomo, and Lendora has resurfaced on Blast, orchestrating new schemes to siphon funds from unsuspecting victims. Recent investigations by on-chain detective ZachXBT have revealed the movement of approximately $1 million in laundered funds to fuel their illicit activities.

ZachXBT's meticulous tracking of the illicit funds commenced with their transfer from an Ethereum address associated with prior scams to a different address on the Polygon network. Subsequently, the assets underwent a transformation into Wrapped ETH (wETH) and were meticulously navigated across various blockchain networks, utilizing bridging services like Orbiter and Bungee.

The ultimate destination of the laundered funds was the Blast platform, where they were deployed for the acquisition of LEAP tokens, effectively boosting liquidity in a transaction that bears all the hallmarks of a setup targeting unsuspecting victims. Concurrently, ZachXBT's investigations suggest that the same individuals may be orchestrating another ongoing project on the Base platform, ZebraLending, which currently boasts a total value locked (TVL) of approximately $311K.

This group has established a nefarious track record of initiating numerous projects that initially attract significant TVL, only to abscond with the accumulated funds when the opportune moment arises. Their modus operandi frequently involves the fabrication of Know Your Customer (KYC) documentation and the strategic collaboration with auditing firms of questionable repute to cultivate an illusion of legitimacy.

The group's malicious activities have spanned multiple platforms, including Base, Solana, Scroll, Optimism, Arbitrum, Ethereum, and Avalanche, demonstrating their adaptability and extensive presence within the blockchain ecosystem.

Vigilance Critical as Fraudulent Schemes Proliferate

The relentless recurrence of these scams underscores the paramount importance of vigilance within the blockchain community. Investors are strongly urged to exercise heightened caution, particularly regarding novel initiatives on platforms such as Blast that involve substantial fund transfers.

Diligent verification of project credentials, scrutiny of audit reports, and a thorough comprehension of the channels through which funds are transacted are essential measures individuals can undertake to safeguard their investments. Additionally, members of local communities are encouraged to share information and collaborate in identifying suspicious activities, thereby mitigating further victimization.

Blast Exploited for $62 Million

The launch of new scams on Blast coincides with the recent exploitation of the platform's popular nonfungible token (NFT) game, Munchables. On March 26, Munchables announced that it had fallen prey to a $62 million exploit, promptly initiating efforts to track the exploiter's movements and obstruct further illicit transactions.

Massive Ethereum Withdrawal from Blast

The Blast platform has also witnessed a substantial withdrawal of Ether (ETH) from its Ethereum layer-2 network following the launch of its mainnet on February 29. Approximately $400 million in ETH was removed, unlocking nearly $2.3 billion in staked crypto that had previously been locked within the network. Just days prior to the announced mainnet launch, Blast surpassed $2.1 billion in total value locked (TVL).