Ordinals Finance Deceived Investors with a $1 Million Rug Pull Scam

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Key takeaways:

  • According to blockchain security company CertiK, Ordinals Finance engaged in an exit scam that stole $1 million.
  • On April 24, the ETH-based DeFi protocol, Ordinals Finance, removed all its information from the market.

It has been claimed that Ordinals Finance, a decentralized finance (DeFi) protocol on Ethereum that enables users to lend and borrow inscriptions, engaged in an exit scam, sometimes known as a “rug pull.”

The protocol’s developer removed 256 million OFI tokens from its smart contracts using a “safuToken” function, according to a report from blockchain security company CertiK on April 24. According to CertiK, an “ownerRewithdraw” function deleted a further 13 million OFI, increasing the total number of tokens withdrawn to 269 million.

According to Ordinals Finance, a protocol for creating decentralized finance (DeFi) apps using Bitcoin would be built. On the Ordinals protocol of Bitcoin, it was purportedly intended to develop applications for lending, borrowing, staking, farming, and trading. Despite the fact that the project said it would ultimately use the Bitcoin network, Ethereum was used to create its native OFI token. 

Bitcoin Ordinals, which is still in operation and is used to mint collectible things via on-chain inscriptions, is not officially affiliated with Ordinals Finance. On April 24, the ETH-based DeFi protocol, Ordinals Finance, removed all its information from the market. The Twitter account for the project seems to have been deleted.

According to the blockchain security company, the overall loss to investors is $1 million. According to CoinGecko data, the market value of OFI was $2.3 million prior to the purported exodus, but it dropped to just over $143,000 following it. This suggests that there were losses of over $2 million. However, the smaller amount being reported by CertiK may be due to some OFI token owners selling as the news spread. 

According to blockchain data, the Ordinals deployer account used the safuToken function to withdraw more than 256 million OFI tokens. These funds allegedly went through several transactions before being transferred to a different Ethereum account. Blockchain data reveals that before putting the tokens into Tornado Cash, this address received OFI from several separate addresses.

As a result of the popularity and explosive expansion of cryptocurrencies and decentralized finance (Defi), scam schemes continue to surface on the market. Despite several cautions, many investors fall into elaborate traps that have been put up. Once the implementers have amassed a sizable sum, they can manipulate investors. The sequence of events using Ordinals Finance can be thought of as following this.

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