After the allegations about the possible "rug pull" broke, the company deleted its social media accounts.
Ordinals Finance, a decentralized finance (DeFi) protocol on the Ethereum network allowing customers to borrow and lend inscriptions, has reportedly pulled off a $1 million exit scam.
CertiK, a well-known blockchain security firm, broke the news in an April 24th press release.
Did you know?
Want to get smarter & wealthier with crypto?
Subscribe - We publish new crypto explainer videos every week!
What is Ethereum 2.0? Upgrades Easily Explained With Animations
The firm revealed that the developer of Ordinals Finance withdrew a staggering 269 million OFI tokens from its smart contracts using a "safuToken" and an "ownerRewithdraw" function.
The security firm estimates the damage to investors is around $1 million.
According to BitDegree data, OFI's market cap plummeted from $2.3 million to a mere $143,000 following the alleged scam. At the time of writing, the market capitalization is less than $100,000, recording a whooping 96% decrease in the last 24 hours.
Although the numbers suggest losses greater than $2 million, the actual amount reported by CertiK might be lower due to some OFI token holders potentially selling their tokens as the news spread.
Digging into the blockchain data, after withdrawing more than 256 million OFI tokens, a malicious actor transferred the funds to another Ethereum account via several transactions. This receiving address collected OFI from various addresses before depositing the tokens into sanctioned crypto mixer Tornado Cash.
Further analysis shows that after obtaining the 256 million OFI tokens, the deployer account made a dozen transactions to swap OFI for Ether (ETH). The deployer then moved over 85.5 ETH (worth around $156,000) to an account ending in "cCF" and deposited it into Tornado Cash.
Meanwhile, Ordinals Finance's Twitter account seems to have vanished.
CertiK's revelations about Ordinals Finance's alleged rug pull act as a stark reminder of the risks associated with decentralized finance, urging investors to tread cautiously in the DeFi space.
At the beginning of April, blockchain security firm Immunefi shared a report revealing that around 70% of scams occur on the Ethereum and BNB Chain networks.
