- Binance halts a planned plan exit scam on DeFi investors.
- About $30,000 was lost but restored to Chinese investors.
Scammers have been a plague stunning the growth of the nascent decentralized finance (DeFi) space, including the cryptocurrency industry in general. While some scammers could luckily get away with the acts, many of them could still be intercepted by crypto companies and exchange – thanks to their effective anti-money laundering policies and other security measures put in place to curb risks with digital currencies.
Today, the leading cryptocurrency exchange, Binance, informed on Wednesday how it halted a planned exit scam, helping the disgruntled investors to recover their hard-earned funds.
Unnamed DeFi project tried exit-scamming investors
As Binance narrated, an unnamed Chinese investor, together with a friend, garnered nearly $30,000 (or 200,000 yuan) to invest in the DeFi yield farming project, following the frenzy of high-yielding profits hovering around the industry. As the investor explained, he only wanted to earn good profits within a short period. However, he didn’t know that “it was the beginning of a disaster.”
The next morning after the investment was made, the Chinese investor discovered that the project’s website wasn’t available anymore, including the social media handles. At that point, the Chinese investors learned that they had been scammed. Later, they found other victims of the project through, as they created a Telegram group, probably to know if they were the only affected investors.
Binance: CEX merit in play
The disgruntled investors tracked the cryptocurrency moved by the scammers and discovered that the cryptos had been split into ten different Binance accounts. Then, they reached out to the cryptocurrency exchange, which froze the accounts, and returned the funds to the disgruntled investors – one other merit of CEXes.
Meanwhile, this swiftly comes as a warning to investors looking to deal with new or unfamiliar projects. It’s advisable to always conduct a thorough research about any project before parting your hard-earned money to it in the name of investing.