The post Sorta Finance Likely Planning Exit Scam on Arbitrum, Warns ZachXBT appeared first on Coinpedia Fintech News
A DeFi project known as Sorta Finance based in the Arbitrum network is currently in the eye of the law after being accused of being an exit scam by crypto sleuth ZachXBT.
The prominent personality, ZachXBT, in the crypto space, published a strict warning on the social media platform Twitter concerning the new entrant known as Sorta Finance. The same deployer reported by his investigation is involved in multiple scams, where over $25 million were stolen from investors, including Sorta Finance.
The operation of these swindlers seems to be based on forking Compound V2 on various Ethereum Virtual Machine (EVM) compatible chains. : After building quite a large TVL, they usually suspend all withdrawals and borrowing services, which can be referred to as a ‘rug pull’ of all the users and the subsequent disappearance of the money.
ZachXBT Highlighted Several Red Flags in his Tweet:
This deployer and the first address that made any transactions with Sorta Finance smart contracts both received 100 ETH freshly from Tornado Cash, a mixing service that helps hide the source of funds.
– Sorta Finance’s contracts are inked by low-quality audit firms that sign off on those contracts, while Sorta Finance offers fake KYC documents.
– They also share posts from less sophisticated influencers in paid collaborations and make people invest.
Sorta Finance is just the deployer of past scams that contributed to frauds that burgeoned in the contemporary period.
ZachXBT linked several previous scams associated with the Sorta Finance deployer, which includes projects like Magnate, Kokomo, Lendora, Solfire, Crolend, and HashDAO. In other incidents this year, the scam team was able to pull off such scams on different sites such as Blast, Base, and Arbitrum to the detriment of many in the crypto industry.
ZachXBT to the Rescue
The timely nature of ZachXBT’s alert saves more assets by letting the community know about the danger to come.
For those who already invested in Sorta Finance, it is recommended to withdraw the invested funds as soon as possible and have nothing to do with the protocol.
As with any investment opportunity, one needs to be cautious of overhyped opportunities and put a lot of effort into researching financial services before deciding to invest in them to avoid the pitfalls of DeFi investing.