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The NFT market is a dynamic landscape teeming with innovation and opportunities. However, with great potential comes great risks. The recent alleged exit scam carried out by the team behind the gaming project FinSoul serves as a stark reminder of the dark side of the burgeoning NFT space.
The Rise and Fall of FinSoul
FinSoul, a gaming project that recently surfaced in the cryptocurrency market, promised a revolutionary gaming platform to its investors. The team behind FinSoul allegedly used elaborate schemes and hired actors to pose as executives to attract investors. On the surface, everything seemed promising, until it all came crashing down.
On October 10, the development team behind FinSoul allegedly performed an exit scam, siphoning away $1.6 million from unsuspecting investors. This act of market manipulation has left the crypto community in shock and investors in despair.
FinSoul’s development team allegedly employed actors to impersonate top executives, creating an illusion of a robust management team. With this facade, they successfully raised a substantial amount for the development of their gaming platform. However, instead of utilizing the funds for the intended purpose, they allegedly transferred this money to themselves.
The Money Trail
Following the money trail, blockchain data shows that FinSoul’s development team transferred $1.6 million in bridged Tether (USDT) from investors to themselves. This fund transfer was done in a way that would obfuscate its origin.
In an attempt to obscure the funds’ origin, the team used a popular cryptocurrency mixer, Tornado Cash. This platform is known for its ability to provide transaction privacy by breaking the on-chain link between source and destination addresses.
Notably, this was not the first time the FinSoul developers have faced accusations of misconduct. Earlier this year, a decentralized finance (DeFi) project named Fintoch claimed to have adopted advanced technology to develop a metaverse platform. However, it was later revealed that the Fintoch DeFi project itself had performed an exit scam, allegedly stealing $31.6 million and attempting to launder the funds on the Tron blockchain.
A Case of Rebranding
In response to these allegations, security platform CertiK claimed that the FinSoul team had rebranded as “Standard Cross Finance (SCF)” in August.
CertiK produced evidence showing that the key executives of Fintoch and Standard Cross Finance are identical individuals. These so-called executives, including the CEO, CFO, and COO, were found to be actors from the entertainment industry.
Despite their tarnished reputation, the rebranded Standard Cross Finance team continued to promote FinSoul on various platforms. They showed a video featuring an alleged “R&D Headquarters” and organized a promotional event in Vietnam, further deceiving investors.
Blockchain Data Analysis
Blockchain data paints a clear picture of the market manipulation by FinSoul. On October 10, the FinSoul project deployed its token contract on the BNB Smart Chain network, minting 100 million FinSoul (FSL) tokens.
The deployer account then transferred a portion of the tokens to other accounts, ultimately retaining 97 million FSL tokens. One of the transfers involved creating a liquidity pool for FSL on PancakeSwap, a decentralized exchange.
Initial trading of FSL started at $0.3911 per token, and within hours, the price skyrocketed to $17.5774 before settling around $5. However, between 4:30 pm and 5:00 pm UTC, the price suddenly plummeted to nearly zero.
The Future of FinSoul
Despite the alleged fraudulent activities, the Standard Cross Finance team has managed to convince investors to reinvest in their project. They have relaunched FSL with a new token contract, which currently holds a value of $1.29 per coin.
The team has successfully managed to relaunch FSL with a new token contract, which currently holds a value of $1.29 per coin, showing the resilience or perhaps the audacity of the perpetrators.
Investors, still reeling from the shock, are left pondering whether to reinvest in the relaunched project or to cut their losses and move on. The future of FinSoul and its impact on the NFT trading volume remains uncertain.
Conclusion
The FinSoul saga serves as a cautionary tale for investors in the NFT space. It underscores the need for comprehensive due diligence, stringent regulation, and heightened vigilance in the realm of digital assets. The promise of high returns often carries high risks, and it’s crucial for investors to understand what they’re getting into before diving headfirst into such ventures.
