In a stunning twist of events, a small crypto investment platform known as Fintoch or DFintoch mysteriously vanished into thin air along with $31.6 million of user funds. Promising investors a daily profit of 1% and claiming ties to the prestigious financial institution Morgan Stanley, DFintoch now appears to have been an elaborate scheme designed to steal people's hard-earned money.
As investigations unfold, it has been revealed that DFintoch's website was registered as early as April 2022, yet it lacked any meaningful presence on social media platforms. Furthermore, a report published in March shed light on the fact that the image used to depict the company's supposed CEO, Bobby Lambert, was actually that of a paid actor named Mike Provenzano, exposing the use of a fabricated identity.
The deceptive tactics employed by DFintoch have been brought to light by cryptocurrency investigator ZachXBT. It was uncovered that the venture falsely presented itself as "Morgan DFintoch”, leveraging the esteemed reputation and trustworthiness of Morgan Stanley. However, Morgan Stanley promptly released a statement categorically denying any affiliation with the project, emphasizing their complete dissociation from DFintoch's fraudulent activities.
The Monetary Authority of Singapore (MAS) had cautioned users beforehand regarding the platform’s deceptive nature and subsequently included DFintoch in its Investor Alert List. DFintoch’s disappearance underscores the importance of conducting thorough due diligence and exercising caution when investing in the cryptocurrency space. It serves as a stark reminder for investors to verify the legitimacy of projects, scrutinize claims of affiliations, and remain vigilant in the face of potential scams and fraudulent schemes.
DFintoch’s unraveling also highlights the role advanced technologies such as forensics play in uncovering fraudulent activities within the cryptocurrency industry. Insights from blockchain analytics and intelligence could have played a vital role in uncovering the fraudulent activities of DFintoch. By utilizing transaction tracking, address clustering, and risk assessment, investigators could have identified suspicious patterns, traced the flow of funds, and assessed the reputational risk associated with the project.
Unveiling the Fallout: The Aftermath of the DFintoch Scam
The sudden disappearance of DFintoch has left many investors unable to retrieve their funds, with reports revealing the movement of user deposits from the Binance Smart Chain to Ethereum and Tron blockchains.
The flow of funds from DFintoch addresses to swap protocols
Merkle Science's investigations have shed light on critical findings:
- Transfer of Funds to Potentially Fraudulent Address
31.6 million BUSD tokens were transferred from the platform's smart contract to an address potentially owned by a scammer (address 1).
- Distribution of Funds to Suspicious Addresses
Most of the funds were distributed to multiple addresses that potentially belonged to the scammer.
- Funds Flowing into TRON and ETH Blockchains
A significant amount of funds moved into the TRON and ETH blockchains through a multi-chain swap contract.
- Creation of Spam Tokens
Scammers created a large number of spam tokens, potentially to obfuscate transaction flow and evade detection. These tokens were minted using contracts from identified Fake Phishing addresses, with names like BEP-20: Fintoch STO and BEP-20 TOKEN.
- Token Swapping and Accumulation:
BUSD tokens were swapped into other tokens using multiple swap contracts or platforms. Approximately 95% of the funds accumulated in a smart contract with the address 0x1ed5685f345b2fa564ea4a670de1fde39e484751.
- Connection to Previous Exploits and Attacks:
One of the contracts used for swapping tokens from DFintoch was also involved in swapping funds associated with previous exploits and attacks, including incidents related to Ankr, GDS, DKP, Rubic, and NFTCloud.
Merkle Science is closely observing the flow of funds and the above insights are a part of an ongoing investigation.
Picking up the Pieces: The Impact of DFintoch
The rug pull scam orchestrated by Morgan DF Fintoch serves as a stark reminder of the risks associated with investing in the non verified crypto projects. It highlights the importance of regulatory actions, greater scrutiny, and the need for a safe and transparent ecosystem. Rebuilding trust in the industry requires collaborative efforts from all stakeholders and the integration of blockchain analytics to detect and prevent fraudulent activities. By learning from such scams, the crypto industry can evolve and establish a solid foundation for future growth and innovation.