A $31.6 million Rug Pull? How to spot the traps of high-yield scams

Recently, a Ponzi scheme called Fintoch is suspected of absconding with $31.6 million in funds, leaving users with a lot of feathers. How can users protect against "Rug Pull" items?

Written by: Beosin

Have you ever been a victim of Rug Pull in the Web3 world?

Rug pulls are often carried out by dishonest developers or teams who may intentionally deceive or mislead users in order to steal their assets in case of an abrupt exit.

They may use tactics such as false high-return promises or celebrity endorsements to attract user investment, and once they raise a large amount of money from investors, they will "run away."

Rug pulls are a serious threat to the Web3 ecosystem as they undermine user trust and confidence in decentralized projects and hinder the development of the technology.

Recently, a Ponzi scheme called Fintoch was suspected of absconding with $31.6 million in funds, leaving users with a mess. **Today, we will teach you to identify similar high-yield scam traps, and at the same time use the Beosin KYT anti-money laundering platform to take you to track the movement of funds. **

How does the Fintoch project trick users into participating?

The first point is the packaging, in order to enhance its credibility, ** the platform fraudulently claims to be associated with the well-known financial institution Morgan Stanley. **

Fintoch Chinese introduction

Then package social accounts, sponsor activities, and let the big media publish articles, telling everyone: "**We are a serious project party." **

Fintoch's press release in the media

It turns out that the CEO and many others listed on their website are fake paid actors.

Then publicize the rate of return of the project to attract a large number of users to participate.

Fintoch gained traction by offering unsustainable returns and exploiting investor greed, but its true nature as a Ponzi scheme has become apparent.

Ponzi schemes rely on a constant influx of new investment to maintain payments to early participants. **Eventually, the scheme fell apart when the mastermind disappeared with the raised funds. **

Beosin KYT takes you to track the movement of funds

** From the records on the chain, we can see that the project party is suspected to have run away with money. **

We used the Beosin KYT anti-money laundering analysis platform to find that the relevant contract address displayed abnormal warnings and was marked as fraud-related.

Beosin KYT's complete risk scoring mechanism can pass ** the continuous monitoring of virtual asset transactions, the risk penetration assessment of each transaction's capital flow, not only output the risk score of the address/transaction, but also output the details of each risky transaction With transaction characteristics, we can also grasp the risk situation in an all-round way. **

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Beosin KYT Anti-Money Laundering Analysis Platform

When we enter the relevant address into the KYT system, we can see the distribution of Fintoch STO tokens: 20,000 tokens were transferred and then converted into 31,666,317 BUSD, and BUSD was sent from the BNB chain to TRON and other public chains.

Beosin KYT anti-money laundering analysis platform part of the fund flow diagram

Beosin KYT traces the source and whereabouts of the funds of the designated account, can conduct comprehensive, fast and accurate data analysis, and conduct real-time risk judgment on cryptocurrency transactions through the risk analysis engine**. **

How users can prevent "Rug Pull" items

To prevent falling victim to Rug Pull, users and investors should exercise caution when choosing to participate in projects. **Users should thoroughly research the project's background and development team, assess the project's risks and potential benefits, and use trusted resources to evaluate the project's reliability and security. **

Here are some things you can do to avoid falling victim to Rug Pull scams when looking for investment opportunities in the Web3 space:

1. Research the project: Before investing, it is very important to understand the background of the project and the development team. Find information about the team's experience, qualifications and past involvement in projects.

2. Assess the risks and potential benefits of the project: Consider the overall risk-to-benefit ratio of the project you are considering investing in. Is the potential benefit worth your investment?

3. Use credible resources: Use credible resources such as audit reports and community feedback to evaluate the reliability and security of the project.

4. Diversification: Don't put all your eggs in one basket. Consider spreading your investment across multiple projects to reduce overall risk. This protects you if an item turns out to be a scam.

5. Be cautious about high returns: Be wary of projects that promise very high returns or look too good. High returns often come with high risks, and projects that promise quick and easy profits are often scams.

6. Follow the latest news of the project: keep abreast of the latest news and updates of the projects you invest in. Follow the project's social media channels, read the project's blog, and stay informed of any changes or developments that may affect your investment.

**Keep in mind that scams are always evolving, so it's important to stay vigilant and stay up-to-date. If you are unsure about a project or investment opportunity, it is best to be cautious and avoid getting involved. **

At the same time, users, developers, and regulators need to work together to create a safer and more reliable environment for Web3 projects and prevent these types of scams from happening.