Altcoin project Defrost v1 hacker is reportedly returning funds as allegations of ‘exit scam’ surface. In response to the allegations and the event, one user said, “Merry Christmas guys. We got a piece of coal from Santa Claus,” he wrote.
‘exit scam’ warning for this altcoin project from CertiK
Blockchain security firm CertiK issued an alert for Defrost Finance on Dec. CertiK claimed that the altcoin project was an ‘exit scam’. Defrost Finance is a decentralized leverage-trade platform on the Avalanche Blockchain, which was hacked recently. The move came after Defrost announced that ‘the hacker involved in the v1 hack (not the v2 hack) has returned the funds’. Certik wrote on the subject:
We saw an ‘exit-scam’ on Defrost Finance on December 24th. We tried to contact multiple members of the team. However, we did not receive a response. The team is not KYC. However, we use all the information we have to assist the authorities.
Defrost Finance suffered a flash-credit attack on December 23. In the attack, $12 million worth of assets of protocol users in protocols v1 and v2 were stolen. Immediately after the exploit, blockchain analytics firm PeckShield also issued a warning. PeckShield claimed the operation was a ‘rug-pull’. In this context, he made the following warning:
We’ve received community intelligence warning that Defrost Finance is in trouble. Our analysis shows that a fake collateral token has been added. It also reveals that a malicious price oracle was used to liquidate existing users. We estimate damage at $12 million.
Defrost announced that the stolen funds were returned!
In a brief post-mortem analysis, the project developers said that the hackers also managed to steal the admin key for a much larger attack on the v1 protocol than the flash-credit exploit. Defrost offered to negotiate “to share 20% of the funds in exchange for the majority of the assets.” Accordingly, he urged hackers to contact them as soon as possible.
According to an update on the altcoin project’s website, close to $3 million in digital assets have been transferred to the project’s Ethereum wallet address. In a Medium post published hours later, Defrost explained that the v1 hacker returned the stolen funds to an address controlled by the project developers. In this context, Defrost made the following statement:
Soon we will start scanning data on-chain to find out who owns what before it gets hacked to return it to the rights holders. Different users have varying ratios of assets and liabilities. So, we think this process will take some time. However, we will conclude fairly quickly.
CertiK Skynet warning for defrost / Source: CertiKHowever, this is a developing story and accordingly, follow the updates on Kriptokoin.com.
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