Losing $31.6 Million In DeFi Lending Protocol Fintoch's Exit Scam
When you interact with the DeFi protocol, you get a feeling that it is safe. Since people have negative experiences in centralized crypto exchanges, they rush into Decentralized Finance (DeFi). DeFi is supposed to be decentralized and secured, so how come DeFi lending protocol disappears and pulls an exit scam?
You cannot say any platform is decentralized only you see it says decentralized. Decentralized Finance (DeFi) protocol Fintoch provides P2P lending and investment services, and many people get involved in it. Now Fintoch is the latest DeFi protocol that pulls an exit scam that causes investors to lose $31.6 million.
It is claimed that Fintoch is affiliated with the American multinational investment bank and financial services company Morgan Stanley. It gives people more trust and credibility in the DeFi protocol Fintoch. Morgan Stanley clarifies its stance that it has no association with the DeFi protocol. They make distance from the scam Fintoch.
I was wondering why big financial institution clarifies their position after the scam. Did they have no idea that their brand name was used to deceive people? Maybe Morgan Stanley did not know about this before occurring this incident.
It is sad that investors lost 31.6 million. I'm surprised to know that Fintoch offers a 1% daily return on investment (ROI). If you are aware of the crypto market, the whole market is on a downtrend. It is obvious this is a bear market. So how much return did you get on your crypto investments during this time? In a bear market, you cannot make a huge return on your investments.
How is DeFi lending protocol Fintoch able to offer a 1% return on investment (ROI) daily? That's a red flag since it will not be sustainable. They just lure investors to invest in their protocol until the rug pulls. If something does not appear to be reasonable after doing your analysis and research, it is better to stay away from that.
According to Web3 expert and on-chain analyst ZachXBT, 31.6 million worth of Tether (USDT) has been transferred to multiple addresses on the Ethereum and Tron networks. Investors want to get an explanation on Twitter. They reached out to Fintoch customer support to get an answer and ended up getting automated responses.
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