Blast Ecosystem’s ‘RiskOnBlast’ Rug Pulls $1.3M Ether in Apparent Scam

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Hassan Shittu

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Hassan Shittu

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Hassan, a Cryptonews.com journalist with 6+ years of experience in Web3 journalism, brings deep knowledge across Crypto, Web3 Gaming, NFTs, and Play-to-Earn sectors. His work has appeared in...

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February 26, 2024

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The RiskOnBlast project, a gambling platform based on the Blast layer-2 ecosystem, has come under suspicion following the disappearance of its funds, website, and social media presence, raising concerns of a potential rug pull—the first of its kind on Blast.According to Arkham Intelligence, balances on the RiskOnBlast platform suddenly plummeted to zero on February 25, indicating a possible siphoning of funds from the project.

First Rug Pull on Blast as RiskOnBlast Project Disappears

Over the weekend, the highly anticipated Blast ecosystem experienced its first rug pull event, leaving investors reeling as a project vanished after raising over 420 ether (ETH), equivalent to $1.3 million at current prices, from retail traders.During its presale token event, which commenced on February 22 and concluded the following day, GambleFi, the parent project of RiskOnBlast, managed to raise 420 Ether, equivalent to $1.25 million, for its RISK token. However, on February 25, the team behind the project transferred the funds in batches of Dai to ChangeNOW, a non-custodial cryptocurrency exchange.The anonymity of the RiskOnBlast team, coupled with the sudden disappearance of its social media accounts, has raised concerns among investors. Onchain researcher SomaXBT revealed on X that funds from over 750 wallets were stolen, with a portion of the stolen funds being sent to swapping services and crypto exchanges.

1.@Riskonblast rugged 420 ETH worth $1.25 million from 750+ victims.
Scammers lent $497k through @ChangeNOW_io , $360k through @MEXC_Official and $187k through @Bybit_Official exchange
contract on L1
0x25f8C342E430C85829Ef5021C0720f0c60969840. 🧵 pic.twitter.com/XK2w2gTo8X

— SomaXBT (@somaxbt) February 25, 2024

Adding to the suspicions, Etherscan flagged the project’s address as a phishing scam, cautioning users to exercise vigilance when interacting.

Furthermore, Coinbase tech lead Andrew Choi issued an alert on February 25, noting the sudden disappearance of the project’s website and social media presence.

Analysis pointed to a well-orchestrated deception, with CertiK Alert indicating that RiskOnBlast’s official X account had gone dark shortly after funds were siphoned off.

#CertiKSkynetAlert 🚨

Over the weekend we have seen an exit scam on @riskonblast with ~$1.3m taken from an IDO which was capped at 420 ETH

The project's X account and website were deleted and funds were distributed to multiple sources including Bybit and MEXC pic.twitter.com/NKO6HJSGwz

— CertiK Alert (@CertiKAlert) February 26, 2024

Furthermore, blockchain sleuth Amir Ormu reported on February 25 that the RiskOnBlast team had allegedly laundered $850,000 of the stolen funds using ChangeNOW as a mixer to obscure the transaction trail.

Funds were also purportedly sent to exchanges, including MEXC and Bybit.

Red flags were raised concerning the RiskOnBlast project, particularly regarding the small three-person team behind it, whose identities were not publicly disclosed.

While Blast itself does not directly control the actions of projects on its blockchain, its previous endorsement of RiskOnBlast on its official X handle could have been perceived by investors as a sign of legitimacy, adding to the shock of the rug pull.

Community Mobilizes to Recover Lost Funds

A rug pull, or exit scam, involves a team raising funds from the public by selling a token, only to shut down operations abruptly. Blast, an Ethereum layer-2 project, has garnered significant attention, attracting over $1 billion in capital in recent months ahead of its launch.However, despite accumulating $2 billion in total value locked, primarily from airdrop hunters, since its announcement in mid-November, the platform has faced challenges, including bugs and controversies, in the months following its inception.RiskOnBlast’s disappearance comes as a blow to investors, highlighting the risks associated with investing in new projects, particularly in cryptocurrency.In response to the alleged rug pull, the crypto community has rallied to track down the missing funds. Victims, including non-fungible token investor “MoonCat2878,” who reported a loss of $12,500, have pledged to donate 1 ETH to blockchain sleuth ZachXBT and have also offered to hand over $12,500 to assist in the recovery of lost funds should they be retrieved. Another victim disclosedlosses amounting to $10,000.Meanwhile, Blast announced on Saturday via an X post that it had selected 47 projects as winners of its developer competition from a pool of 3,000 applications. These teams will receive undisclosed funding in the coming months to support the development of the ecosystem on the new blockchain.