SafeMoon Facing SEC Scrutiny Over Fraud Allegations Following a $8.9M BNB Breach
Summary:
SafeMoon, a decentralized finance project, faces charges from the SEC regarding security violations and possible fraud. Following a breach in March that resulted in the loss of $8.9 million in BNB, funds have been spotted transitioning through central exchanges, drawing the attention of blockchain analysts. Match Systems has identified a vulnerable spot in the project's smart contract, which may have been exploited by an attacker, leading to a significant increase in token value and the transfer of 27,380 BNB to the attacker's address. The incident, coinciding with an update, has sparked concerns about possible insider involvement. Though the attacker initially proposed returning 80% of the funds, further transfers have occurred, making their tracking crucial for law enforcement.
SafeMoon, a decentralized finance venture, recently faced allegations from the United States Securities and Exchange Commission (SEC) for breaking security regulations and committing fraud. The company has stated that it is diligently focusing on these developments and aims to rectify the situation swiftly. In an announcement made on X (formerly known as Twitter), the firm affirmed that its teams are diligently working on improving the program. It said they are resolved to maintain service to their customers while progressing towards the realization of their strategic vision and ultimate mission.
Back in March, SafeMoon experienced a breach which resulted in a significant loss of $8.9 million in BNB. The funds involved in this security breach have been seen moving across centralized exchanges (CEXs). Match Systems, a blockchain analysis company, hinted that these transactions might have major implications for investigative authorities.
An evaluation by Match Systems revealed a weak point in SafeMoon's smart contract related to the "Bridge Burn" function. This allowed an attacker to execute the "burn" command for SafeMoon (SFM) tokens at any address. The attacker's actions included the transfer of a significant 32 billion SFM tokens from SafeMoon's liquidity pool address to SafeMoon's deployer address, resulting in a sudden increase in token value. Taking advantage of the sudden price hike, the attacker swapped a portion of SFM tokens for BNB at an extraordinarily high rate, which led to a transfer of 27,380 BNB to the attacker's address.
Match Systems analysis determined that this vulnerability in the smart contract was not present in the older version but was included in the update released on March 28th, the same day as the exploit. This coincidence has raised doubts regarding potential insider involvement.
Initially, the attacker claimed the exploit was accidental and expressed intentions to return 80% of the stolen funds. However, since then, multiple transfers of the funds associated with the exploit have been noticed across centralized exchanges like Binance. Match Systems anticipates that these transactions might be crucial for the police to trace and apprehend the culprits.
Published At
11/3/2023 1:47:27 PM
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