Fintoch DeFi Platform Executes $31.6 Million Rug Pull Scam

Summary

In May 2023, the DeFi investment platform Fintoch executed a rug pull, defrauding users of $31.6 million. The project claimed backing by Morgan Stanley and offered unrealistic 1% daily returns. Fintoch’s legitimacy was questioned, after Morgan Stanley debanked Fintoch’s claims. The fradulent company launched a public sale, and accumulated a large amount of USDT in Fintoch STO smart contract. The smart contract was deployed in Binance Smart Chain, and contained functionality of FTH BEP20 token and FTH/USDT liquidity pair. A large amount of FTH tokens was initially transferred to the address controlled by the scammers, and after reaching some critical point, the scammers exchanged them for USDT. This leds to FTH price to dump, and left investors with valueless tokens. The funds were bridged to Ethereum and Tron chains. As of December 12, 2023, no legal action or recovery efforts have been reported.

Attackers

The scammers behind Fintoch remain anonymous. They utilized a fake CEO, Bob Lambert, actually an actor named Mike Provenzano, to misrepresent the platform.

Losses

Fintoch stole 31,697,984 USDT from investors.

Timeline

May 4, 2023: Monetary Authority of Singapore issued a warning to investors regarding Fintoch.
May 13, 2023: Fintoch hosted an event in Dubai related to the launch of their token.
May 22, 2023, 12:58 PM UTC: Malicious transaction occurred on Binance Smart Chain, with over 31 million USDT being drained from fundraising smart contract.
May 23, 2023, 9:56 PM UTC: Independent on-chain investigator ZachXBT published a post on Twitter, highlighting the further funds movement.

Early Indicators

False Identity: Morgan Stanley affiliation, fake CEO - Bob Lambert.
Unrealistic Returns: Offered a 1% daily ROI.
Suspicious Token Distribution: Large amount of FTH tokens weren’t added to liquidity pool, which left possibility of rug pull and might define owners fraudulent intentions.