On-chain investigator ZachXBT has warned about Sorta Finance, a new decentralized finance (DeFi) loan protocol on the Arbitrum network. He says it might be an exit scam, part of a larger plan to steal blockchain.
ZachXBT’s most recent research found that Sorta Finance might be a scam. He compared it to well-known exit scams like Magnate Finance, Solfire, and HashDAO.
In these earlier scams, developers forked Compound’s loan smart contract onto chains that worked with the Ethereum Virtual Machine (EVM), stopped the protocol, and ran off with user deposits.
ZachXBT Accuses Sorta Finance Of Fraudulent Tactics And Shilling
ZachXBT said that the people behind these schemes often look more trustworthy by working with sketchy audit companies and hiring low-level crypto influencers to promote their platforms.
This is called “shilling” in the crypto world. He also said that one of the first people to use Sorta Finance got their money through a Tornado Cash release. Illegal activities can happen because Tornado Cash is a U.S.-approved cryptocurrency mixer often used to hide where transfers come from.
Sort of Finance was said to have less than $100,000 in total value locked (TVL) as of July 25. On the other hand, Crypto Exchange pointed out that similar processes run by the same people have previously gathered millions of dollars in deposits before failing. It seems to him that the people behind Sorta Finance and other scams like it may have taken more than $25 million.
ZachXBT’s study shows that people in the crypto world want to do more to protect the blockchain from crime. As part of plans to make the blockchain safer, hackers, malware, and other illegal activities are shared with SEAL 911 and companies like Coinbase. Their goal is to get better so they are less likely to steal again.
