From Grand Promises to Grand Larceny
On October 10, 2023, the gaming ecosystem was rattled by allegations against FinSoul, a Web3 game project. The development team was accused of orchestrating an exit scam that drained $1.6 million from their project’s liquidity pool. This wasn’t a run-of-the-mill scam, as the team allegedly hired actors to masquerade as executives, adding a layer of deceit to their scheme.
CertiK Unveils the Masquerade
The blockchain security platform, CertiK, played a pivotal role in unearthing the alleged scam. According to their report, the actors weren’t just mere stand-ins; they were part of a well-orchestrated scheme to dupe investors into believing in a non-existent gaming platform. The funds collected for this imaginary platform were allegedly bridged to Tether and later funneled through a crypto mixer, Tornado Cash, effacing the trail back to the scammers.
A Pattern of Deception
This wasn’t the first time FinSoul’s developers were wrapped in allegations. Earlier, on May 23, under the banner of Fintoch, they claimed to have launched a US-based metaverse platform. However, the day bore witness to accusations from on-chain investigator ZachXBT, who reported a hefty exit scam involving $31.6 million. Following this, the team rebranded to “Standard Cross Finance” (SCF), yet the masquerade of deceit continued unabated.
The Facade Continues
Despite their murky past, the rebranded SCF team managed to promote FinSoul through various channels, painting a picture of a thriving R&D headquarters and hosting promotional events. Their charm offensive seemed to work, at least for a while.
The Ill-Fated Token Launch
On the fateful day of October 10, FinSoul minted 100 million FSL tokens. The price soared from $0.3911 to $17.5774, before plummeting near zero as the deployer account offloaded 97 million FSL tokens, draining $1.6 million from the liquidity pool.
A Repeated Offense
Despite the shady history, SCF convinced investors to rally behind them once more, launching a new token contract. As of the report, the new FSL token was trading at $1.29 per coin, showcasing a shocking level of trust or perhaps, ignorance, among investors.
A Cautionary Tale
The FinSoul saga serves as a stark reminder for crypto enthusiasts to exercise due diligence. The recurring scams within the DeFi space, like the FinSoul incident, expose the underbelly of a burgeoning crypto landscape. While the promise of decentralization and transparency is alluring, the road is riddled with charlatans ready to exploit the unguarded optimism of investors.