DeFi Lending Protocol Fintoch Reportedly Rug Pulls Investors for $31.6M

CryptoPotato

2023-05-24 15:05:27

Fintoch, a decentralized finance (DeFi) protocol that offers peer-to-peer (P2P) lending and investment services, has absconded with $31.6 million in cryptocurrencies belonging to investors in an apparent exit scam.

Multiple tweets from Fintoch users complaining about being unable to withdraw their assets were seen on Twitter earlier today, confirming suspicions that the platform had vanished with investors’ funds.

Fintoch Rug Pulls Users

Famous Web3 expert and on-chain analyst ZachXBT announced the rug pull on Twitter late Tuesday, suggesting that the team behind Fintoch had scammed users on the Binance Smart Chain (BSC).

Zach disclosed that Fintoch had transferred 31.6 million worth of Tether (USDT) to multiple addresses on the Tron and Ethereum networks on May 22 around 12:58 pm UTC. The platform’s move caused panic among investors as they reported being unable to withdraw their assets.

Following Fintoch’s silence on the withdrawal issue, several users flocked to the comment section of the platform’s last tweet, published on May 23, demanding an explanation. Users who tried to reach out to the company via its customer support channel were greeted with automated responses.

A Ponzi Scheme?

Fintoch lured investors with the promise of a 1% daily return on investment (ROI) and claims of affiliation with American multinational investment banking and financial services company Morgan Stanley.

However, Morgan Stanley debunked any affiliations with Fintoch, clarifying that it had no relationship with the DeFi protocol, which used its trademark without authorization. The multinational firm distanced itself from any responsibility pertaining to transactions or results that would arise from Fintoch.

Additionally, the Monetary Authority of Singapore (MAS) added Fintoch to its Investor List earlier this month. The list contained firms that “may have been wrongly perceived as being licensed or in any other way authorized or regulated by MAS.”

Meanwhile, Zach argued that Bob Lambert, the CEO of Fintoch – as stated on the platform’s website – does not exist and is a paid actor.

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