Blast Network’s Layer 2 Project Loses Over $1.2M in Suspected Rug Pull (2024)

The Blast network’s layer 2 project, RiskOnBlast, has been scrutinized due to suspicions of a potential rug pull scam surfacing.

The incident has left investors reeling from significant losses estimated at around 420 Ether (ETH), equivalent to approximately $1.25 million at current market rates.

Rug Pull Suspicions

The incident began when community members noticed the abrupt disappearance of RiskOnBlast’s presence on social media platforms.

Arkham Intelligence’s report shows that the RiskOnBlast balances were fully depleted due to fund withdrawals on February 25. Additionally, Etherscan has marked the 0x1E…C558 project’s address as a phishing scam, warning users to be cautious when engaging.

A rug pull is a tactic employed in the cryptocurrency space where developers vanish with investors’ funds, causing a sharp decline in the value of the associated asset and leaving investors empty-handed.

The abrupt deletion of RiskOnBlast’s Twitter account only deepened suspicions surrounding the project’s legitimacy, prompting widespread outcry from analysts and investors alike. MoonCat2878, one of the affected investors, expressed dismay over the losses incurred, going as far as pledging one ETH to blockchain analyst ZachXBT and offering $12,500 to aid in the recovery of lost investments.

Blast Network Under Scrutiny

MoonCat2878’s account of their experience shed light on the initial optimism surrounding RiskOnBlast, which quickly soured as concerns arose regarding changes in the project’s public sale structure. Despite attempts to seek clarification from the RiskOnBlast team, investors were met with delayed and unsatisfactory responses, further deepening doubts about the project’s integrity.

@Blast_L2
you guys clearly shilled these scammers. I contributed cuz i thought its fully safe when you shill this project on your official twitter + you wrote requirements that at least one person from team should be doxxed (kycced). Im just hoping for refunds pic.twitter.com/c2dhh8iQ4j

— blokzi.eth (@bortosz1) February 25, 2024

Blokzi.eth, another Blast network user, lamented the breach of trust, emphasizing the platform’s endorsem*nt of RiskOnBlast as a contributing factor to their financial losses.

The fallout from the alleged rug pull has prompted a broader questioning of Blast’s security measures, with industry figures like Coinbase’s Andrew Choi engaging in discussions to ascertain how such a significant lapse could occur within the blockchain network.

Did @RiskOnBlast on Blast L2 really pull a rug by deleting their website, twitter, discord after raising 1M+ in presale just now? pic.twitter.com/IrhgAfLd9s

— andrewchoi.sol (🍯) (@AndrewChoi5) February 25, 2024

The Blast network was initially hailed for its promising layer 2 solution designed to enhance transaction speeds and reduce costs on the Ethereum network. However, it now faces scrutiny over its handling of the RiskOnBlast incident. Despite getting support from notable entities like Paradigm, the network’s reputation has been affected by the suspected rug pull, raising concerns about the platform’s ability to uphold investor trust and safeguard against fraudulent activities.