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Optimism-based lending protocol Kokomo Finance has been suspected of a $4 million “exit rip-off” that has seen consumer funds plucked out from the platform through a sensible contract loophole.
Blockchain security firm CertiK alerted its followers to the “exit rip-off” in a March 26 Twitter post, noting that the Kokomo Finance (KOKO) token has plummeted 95% in worth in a matter of minutes.
CertiK additionally famous that Kokomo Finance eliminated all social media accounts instantly following the alleged rug pull too.
CertiK mentioned the deployer of KOKO attacked the smart contract code of a wrapped Bitcoin token, cBTC, by resetting the reward pace and pausing the borrow perform.
After that, an handle starting with “0x5a2d..” accredited the brand new cBTC sensible contract to spend over 7000 Sonne Wrapped Bitcoin (So-WBTC).
On 26 March 2023, Kokomo Finance carried out an exit rip-off and stole ~$4 million in consumer funds.
Particulars Beneath https://t.co/BEPwfahblz
— CertiK Alert (@CertiKAlert) March 26, 2023
The attacker then referred to as one other command to swap the So-WBTC to the 0x5a2d handle, which produced a $4 million revenue, in keeping with the safety agency.
A CertiK spokesperson informed Cointelegraph that it was the most important “incident” that they’ve detected on Optimism.
Kokomo Finance is an open-source and non-custodial lending protocol on Optimism, the place traders might commerce for wBTC, Ether (ETH), Tether (USDT), USD Coin (USDC) and DAI.
Kokomo Finance rose up the ranks rapidly in current days, with blockchain information platforms like CoinGecko and DefiLlama formally monitoring it shortly after Kokomo Finance went live on Optimism on March 25.
Current screenshots reveal that greater than $2 million was locked into Kokomo Finance previous to it falling greater than 97%.
@KokomoFinance is an open supply and non-custodial lending protocol constructed on Optimism and @arbitrum .
– Launch on @DefiLlama
– Audited by @0xGuard $KOKO TVL : 2M, is constantly growing, cash will circulate into this lending platform quickly when it’s deployed on @Arbitrum. pic.twitter.com/RduuHBWX39— Az.eth (@0x_az) March 26, 2023
Over 72% of the full worth locked within the Kokomo Finance protocol got here within the type of wrapped Bitcoin, according to information from DefiLlama.
Cointelegraph tried to entry all social media and weblog web sites listed on Kokomo Finance’s Linktree web page, nevertheless, all of those hyperlinks now result in some type of an error web page, suggesting the web page has been eliminated.
Associated: 7 DeFi protocol hacks in Feb see $21 million in funds stolen: DefiLlama
Cointelegraph got here throughout Kokomo Finance’s sensible contract audit, which was reviewed and shared by 0xGuard earlier in March.
Whereas most facets of the audit have been handed, “typographical errors” have been discovered and the proprietor of the KOKO token was discovered to have a one-time potential to 45% of the utmost provide to an arbitrary handle.
Cointelegraph reached out to 0xGuard for remark however didn’t obtain a direct response.
Journal: Should crypto projects ever negotiate with hackers? Probably
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