Explained: The Fintoch Rug Pull (May 2023)

In May 2023, the Fintoch team carried out an exit scam. The team stole an estimated 31.6 million in USDT from its users on BSC.

Inside the Rug Pull

Fintoch was a blockchain financial platform that was allegedly built by Morgan Stanley and promised users a guaranteed 1% return on investment each day. The project was believed to be a Ponzi scheme, and the alleged CEO — pseudonym Bobby Lambert — was found to be a paid actor named Mike Provenzano. Earlier in May, both the Singaporean government and Morgan Stanley published warnings that the platform was a scam.

In May 2023, the team behind Fintoch carried out the rug pull for $31.6 million. After users reported that they were unable to access their funds, the team bridged the stolen cryptocurrency to other blockchains, including Tron and Ethereum.

Lessons Learned From the Attack

Fintoch was a Ponzi project that showed all of the warning signs of an exit scam in the making. Many of the project’s claims — its CEO, affiliation with Morgan Stanley, and registration in Silicon Valley — were completely fabricated, it promised guaranteed ROI, and multiple organizations issued warnings about the scam. Despite this, the founders were able to perform a rug pull for over $31 million.

This incident underscores the importance of doing your research before investing in a Web3 project. To learn more, check out our blog on the warning signs of an exit scam.