Sorta Finance Exit Scam Rug Pull
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Sorta Finance launched as a fork of Compound V2 on Avalanche, and claimed to be an innovative cross-chain lending platform. The platform was able to obtain a smart contract audit, although the audit did warn of a centralization risk in the smart contract. A total value locked of $76k had been invested in the smart contract when ZachXBT was reported on the connections between this project and other previous rug pulls. The project's Twitter account and site both disappeared rather quickly following that. While there was value locked in the smart contract, it's unclear what portion of that belonged to victims as opposed to the Sorta Finance project team.[1][2][3][4][5][6][7][8][9][10][11][12][13][14][15][16]
About Sorta Finance
"Sorta Finance is an innovative cross-chain lending platform on the Arbitrum chain, aiming to provide users with secure, efficient and flexible lending services through advanced cross-chain technology and decentralized smart contracts. Our platform supports multiple blockchain assets, allowing users to seamlessly manage and utilize assets on different blockchains on one platform.
With Sorta Finance, we are committed to breaking down barriers between blockchains and achieving truly decentralized cross-chain lending, allowing every user to enjoy the convenience and opportunities brought by blockchain technology."
The Reality
"According to on-chain detective ZachXBT, Sorta Finance is likely to conduct an exit scam on Arbitrum in the future, so do not use the protocol. This scammer has previously stolen over $25 million through scams such as Magnate, Kokomo, Lendora, Solfire, Crolend, and HashDAO."
"This scammer has previously stolen $25M+ with scams such as Magnate, Kokomo, Lendora, Solfire, Crolend, HashDAO, etc
The deployer was newly funded and the first address to interact with Sorta contracts was newly funded with 100 ETH from Tornado cash.
They operate by forking Compound V2 on various EVM chains.
Once the TVL reaches a sufficient amount they pause withdraw/borrowing and rug all of the users.
Typically they pay low quality audit firms to audit the contracts and provide fake KYC as well as paying F-tier influencer to write long posts."
What Happened
The project Twitter and website disappeared.
| Date | Event | Description |
|---|---|---|
| July 16th, 2024 12:38:05 AM MDT | Sorta Finance Website Capture | The Sorta Finance website is captured as an empty black page by the internet archive. |
| July 17th, 2024 1:06:00 AM MDT | Telegram Promotions | The project is promoted on Twitter/X with a giveaway for those who join tht Telegram channela nd post proof. |
| July 25th, 2024 6:02:00 AM MDT | ZachXBT Warning Posted | ZachXBT posts a warning on Twitter/X.com about the project's history and the potential for rug pulls to happen. |
| July 25th, 2024 6:33:00 AM MDT | Elite Retrieval Tweet | An account named Elite Retrieval posts further expands on ZachXBT's original post. |
| July 27th, 2024 6:44:47 AM MDT | YouTube Short Video | A YouTube video is posted including information Sorta Finance. |
Technical Details
This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?
Total Amount Lost
The total amount at risk has been estimated at $76,000 USD. The total amount lost is unknown.
How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?
Immediate Reactions
How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?
Ultimate Outcome
What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?
Total Amount Recovered
There do not appear to have been any funds recovered in this case.
What funds were recovered? What funds were reimbursed for those affected users?
Ongoing Developments
What parts of this case are still remaining to be concluded?
Individual Prevention Policies
No specific policies for individual prevention have yet been identified in this case.
For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.
Platform Prevention Policies
Policies for platforms to take to prevent this situation have not yet been selected in this case.
For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.
Regulatory Prevention Policies
No specific regulatory policies have yet been identified in this case.
For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.
References
- ↑ @zachxbt Twitter (Accessed Aug 21, 2024)
- ↑ Beware of the Sorta Finance Scam: $25M Heist and Counting! | by Solidity Academy | Jul, 2024 | Medium (Accessed Aug 21, 2024)
- ↑ https://www.binance.com/en/square/post/2024-07-25-sorta-finance-alleged-exit-scam-warning-issued-11273436216385 (Accessed Aug 21, 2024)
- ↑ Sorta Finance (Accessed Aug 21, 2024)
- ↑ Sorta Finance Likely Planning Exit Scam on Arbitrum, Warns ZachXBT: Guest Post by CoinPedia News | CoinMarketCap (Accessed Aug 21, 2024)
- ↑ https://defillama.com/protocol/sorta-finance (Accessed Aug 21, 2024)
- ↑ https://dappradar.com/dapp/sorta-finance (Accessed Aug 21, 2024)
- ↑ - YouTube (Accessed Aug 21, 2024)
- ↑ @Sorta_Finance Twitter (Accessed Aug 21, 2024)
- ↑ audits_public/Sorta Finance.pdf at main · DeHacker-io/audits_public · GitHub (Accessed Aug 21, 2024)
- ↑ @Alyhyanna8 Twitter (Accessed Aug 21, 2024)
- ↑ @karumi289 Twitter (Accessed Aug 21, 2024)
- ↑ @EliteRetrieval Twitter (Accessed Aug 21, 2024)
- ↑ CoinStats - Sorta Finance Likely Planning Exit Scam on Ar... (Accessed Aug 21, 2024)
- ↑ ZachXBT Warns Users About Sorta Finance Possible Exit Scam (Accessed Aug 21, 2024)
- ↑ Sorta Finance Likely Planning Exit Scam on Arbitrum, Warns ZachXBT (Accessed Aug 21, 2024)