A DeFi project claiming to be associated with Morgan Stanley has seemingly stolen $32m worth of user deposits. The funds were stolen in the form of USDT, and many users had previously complained about not being able to withdraw. So far however, 2023 has not seen as high a volume of crypto exploits as 2022 comparatively this far through the year.
Illustration by TradingView
A DeFi project known as Morgan DF Fintoch has reportedly disappeared with $32m worth of user funds in USDT in an apparent exit scam (or rugpull). The project, which incentivized users to deposit by promising 365% APY, claimed that it was associated with investment bank Morgan Stanley, despite the firm publicly stating that they had no affiliation it.
Those investigating the project also noted that the “CEO” of the project used a display picture of actor Mike Provenzano with a made up name. The project had gained significant traction and had amassed more than 70,000 followers on Twitter – despite the fact that many users had complained about being seemingly unable to withdraw their funds from the project.
Investigators found that despite deposits to the platform being made on BNB Chain, the funds were then being sent to the Ethereum and Tron blockchains. Despite the theft however, evidence has shown that 2023 has been more forgiving for DeFi hacks and rugpulls than its predecessor comparatively at this point of the year. Although some experts have suggested that the biggest DeFi hacks of this year are likely yet to come.
Crypto rugpulls refer to a deceptive practice in the cryptocurrency world where unscrupulous individuals or groups create and promote a seemingly promising cryptocurrency project, only to suddenly abandon it after attracting a significant amount of investment. This results in investors losing their funds as the project’s value collapses. The term “rugpull” is derived from the act of pulling the metaphorical rug out from under investors, leaving them with worthless or significantly devalued tokens. Rugpulls typically occur in decentralized finance (DeFi) projects, where the lack of regulation and transparency makes them particularly vulnerable to such fraudulent activity.
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