On July 25, renowned on-chain investigator ZachXBT flagged Sorta Finance, a new Arbitrum-based lending protocol, as a likely exit scam. ZachXBT linked Sorta Finance to past rug pulls like Magnate Finance and HashDAO, suggesting it is part of a criminal group that has stolen over $25 million across various blockchains.
These scammers typically fork Compound’s smart contract, pause the protocol, and withdraw user deposits. They gain legitimacy through shady audit firms and pay low-tier crypto influencers for “shilling.” ZachXBT also noted a Tornado Cash withdrawal funded an early Sorta Finance user, hinting at laundering activities.
Currently, Sorta Finance holds less than $100,000 in total value locked (TVL). However, similar scams have amassed millions before collapsing. This highlights the need for enhanced vigilance and collaborative efforts to improve on-chain safety and prevent blockchain crimes.
