Beware: Blockchain Fraud Group Moves $1M to Launch New Schemes on Blast

A notorious group known for perpetrating blockchain fraud on various platforms has now set their sights on Blast, a popular blockchain network. According to on-chain detective ZachXBT, the group recently transferred around $1 million in laundered funds to finance their fraudulent activities on Blast.

The funds were initially moved from an Ethereum address linked to previous scams to another address on the Polygon network. Subsequently, the assets were converted into Wrapped ETH (wETH) and transferred across multiple blockchain networks using bridging services like Orbiter and Bungee. Ultimately, the funds were used on the Blast platform to purchase LEAP tokens, potentially setting up another scam to lure unsuspecting victims.

In addition to their activities on Blast, ZachXBT suggests that the same group is likely behind a project called ZebraLending on the Base platform, which currently boasts a total value locked (TVL) of approximately $311K. This group has a history of launching projects that attract significant TVL before absconding with the funds. Their tactics often involve falsifying Know Your Customer (KYC) documents and collaborating with less reputable auditing firms to create an illusion of legitimacy.

The group has targeted a range of platforms, including Base, Solana, Scroll, Optimism, Arbitrum, Ethereum, and Avalanche, demonstrating their operational flexibility and extensive presence in the blockchain space. The repeated occurrence of these fraudulent schemes underscores the importance of vigilance within the blockchain community.

Investors are urged to exercise caution, particularly when dealing with new initiatives on platforms like Blast that involve significant fund transfers. Verifying project credentials, reviewing audit reports, and understanding the channels of fund transactions are crucial steps individuals can take to protect their investments. Community members are encouraged to share information and support each other in identifying suspicious activities to prevent further victimization.

The article also highlights a recent exploit on Blast involving a nonfungible token (NFT) game called Munchables, which suffered a $62 million loss on March 26. Additionally, around $400 million in Ether (ETH) was withdrawn from the Ethereum layer-2 network Blast following the launch of its mainnet on Feb. 29, unlocking nearly $2.3 billion in staked crypto previously locked on the network.

As Blast continues to grow in popularity, with its total value locked (TVL) surpassing $2.1 billion, investors and users are advised to remain vigilant and exercise caution when engaging with the platform. The prevalence of fraudulent activities in the blockchain space underscores the importance of due diligence and community collaboration in safeguarding investments and preventing further scams.