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Recently, a suspected Ponzi Scheme named Fintoch fled with $31.6 million, leaving users in a mess. How can users guard against ‘Rug Pull’ projects?

Authored by Beosin

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

Rug Pull is usually implemented by dishonest developers or teams, who may intentionally deceive or mislead users in order to steal users’ assets when they suddenly exit.

They may use false promises of high returns or celebrity endorsements and other strategies to attract user investments, and once they have raised a large amount of funds from investors, they will “Rug Pull”.

Rug Pull is a serious threat to the Web3 ecosystem as they undermine users’ trust and confidence in Decentralization projects and hinder the development of the technology.

Recently, there was a suspected Ponzi Scheme called Fintoch that allegedly absconded with $31.6 million, leaving users in a mess. Today, we will teach you how to identify similar high-yield eyewash traps and track fund movements using the Beosin KYT Anti-Money Laundering platform.

How does the Fintoch project deceive users into participating?

The first point is packaging, and to enhance its credibility, the platform deceptively claims to be associated with the well-known Financial Institution Morgan Stanley.

Fintoch Chinese Introduction

Then package social media accounts, sponsor events, have major media outlets publish articles, and tell everyone: ‘we are a serious project party’.

Fintoch in the media coverage

It has been proven that the CEO and others listed on their website are all fake paid actors.

Continuing to promote the project’s return on investment, attracting a large number of users to participate.

A Ponzi Scheme relies on the continuous influx of new investments to sustain payments to early participants. Eventually, when the planner disappears with the raised funds, the scheme ultimately collapses.

Beosin KYT tracks the movement of funds with you

From on-chain records, we can see that the project party is suspected of pulling a Rug Pull.

We found that the contract Address displayed abnormal warnings on the Beosin KYT Anti-Money Laundering analysis platform and was marked as fraud-related.

Beosin KYT has a comprehensive risk scoring mechanism, which can conduct continuous monitoring of virtual asset transactions, penetrate the risk assessment of fund flows for each transaction, not only output the Address / risk score of the transaction, but also output the details and transaction characteristics of each risky transaction, so we can comprehensively understand the risk situation.

Beosin KYT Anti-Money Laundering Analysis Platform

When we input the related Address into the KYT system, we can see the distribution of Fintoch STO Tokens: 20,000 Tokens were transferred and exchanged for 31,666,317 BUSD, which were then sent from the BNB chain to other public chains such as TRON.

Beosin KYT Anti-Money Laundering Analysis Platform Partial Fund Flow Chart

Beosin KYT traces the source and destination of funds for designated accounts, and can conduct comprehensive, fast, and accurate data analysis, and provide real-time risk assessment of Cryptocurrency transactions through risk analysis engine**.**

How users can guard against ‘Rug Pull’ projects

In order to avoid becoming victims of Rug Pull, users and investors should exercise caution when choosing to participate in projects. Users should thoroughly research the background and development team of the project, assess the risks and potential returns of the project, and use trusted resources to evaluate the reliability and security of the project.

When looking for investment opportunities in the Web3 field, in order to avoid becoming a victim of Rug Pull eyewash, you can take the following measures:

1. Research Project: Before investing, it is important to understand the background and development team of the project. Look for information about team experience, qualifications, and past involvement in projects.

2. Evaluate the risks and potential returns of the project: consider the overall risk and return ratio of the project you are considering investing in, and whether the potential returns are worth your investment?

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

4. Diversification of Investment: Do not put all your eggs in one basket. Consider diversifying your investments into multiple projects to reduce the overall risk of drop. This can protect you when a project turns out to be eyewash.

5. Be cautious of high returns: Be cautious of projects that promise extremely high returns or seem too good to be true. High returns often come with high risks, and projects that promise quick and easy profits are often eyewash.

6. Follow the latest news of the project: Stay informed of the latest news and updates of the projects you have invested 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.

Please remember, eyewash is always evolving, so it’s important to stay vigilant and be aware of the latest developments. If you’re unsure about a project or investment opportunity, it’s best to exercise caution and avoid involvement.

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