- Kokomo Finance suspected in $4M exit scam.
- KOKO token value drops 95% rapidly.
- CertiK exposes smart contract loophole.
In a shocking turn of events, Kokomo Finance, an optimism-based lending protocol, has come under suspicion of orchestrating a $4 million exit scam. The alleged scam involved exploiting a smart contract loophole, leading to the loss of user funds on the platform. Blockchain security firm CertiK broke the news in a Twitter post on March 26, alerting its followers to the dubious activities.
According to CertiK, the value of the Kokomo Finance (KOKO) token plummeted by a staggering 95% within mere minutes as the exit scam unfolded. The security firm also pointed out that all of Kokomo Finance’s social media accounts were promptly removed in the aftermath of the alleged rug pull, further raising suspicions.
CertiK’s investigation revealed that the deployer of the KOKO token targeted the smart contract code of a wrapped Bitcoin token, cBTC. The attacker managed to reset the reward speed and pause the borrow function, paving the way for the scam. Subsequently, an address starting with “0x5a2d..” approved the new cBTC smart contract to spend over 7,000 Sonne Wrapped Bitcoin (So-WBTC).
The attacker then executed another command to transfer the So-WBTC to the 0x5a2d address, resulting in a profit of $4 million, as reported by the security firm. This event has left the cryptocurrency community reeling and questioning the security of such platforms.
Kokomo Finance operates as an open-source and non-custodial lending protocol on Optimism, where investors could trade for wBTC, Ether, Tether, USD Coin (USDC), and DAI. The platform’s sudden disappearance and alleged scam have sent shockwaves through the industry, prompting calls for heightened security measures and scrutiny in the world of decentralized finance.
In other news, Podgorica, Montenegro – Do Kwon, who was recently arrested at the Podgorica airport in Montenegro for attempting to board an aircraft to Dubai using bogus documents, will appeal the court’s decision to extend his incarceration to 30 days, according to his attorney. According to local media outlet Vijesti, the appeal would question the Montenegrin court’s decision to keep Kwon for a longer period of time than is customary in such circumstances.
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