Velvet Capital Temporarily Shuts Down Website Amid Phishing Scam Attempt
Summary:
Velvet Capital, a DeFi asset management platform, temporarily shut down its website to deter a large phishing scam. Following unusual activity on its trading platform, the company issued a cybersecurity warning to investors. It recommended unlinking wallet access from the protocol until resolved. The breach was confirmed by investigation firms Blockaid and Scam Sniffer. Velvet Capital's founder is working with a team to reclaim control. As of now, no user losses have been reported.
Velvet Capital, a decentralized finance (DeFi) asset management protocol, temporarily shut down its website to avert a large-scale phishing scam. Unusual activity was detected on April 23 by members of the cryptocurrency community on X, who noticed odd behavior on Velvet Capital's trading platform. Users attempting to access the front-end received prompts to authorize their wallet's access to the protocol. This led to internal probes by Velvet Capital, which then sent out a cybersecurity warning, instructing investors to reject any wallet connect requests from the application for the time being.
Those investors who may have inadvertently granted the deceitful request are advised to withdraw wallet access to the protocol to safeguard their funds. In order to prevent further financial damage to investors, Velvet Capital also deactivated the application.
The founder of Velvet Capital, Vasily Nikonov, announced the shutdown of the website via Telegram. Investing parties were advised not to engage with the Velvet website while an investigation was conducted and remedies applied.
Approximately two hours post the website shutdown, Nikonov informed that he, along with the tech team and cybersecurity experts, is in the process of retaking control of the website from the intruders.
Blockchain scrutiny companies Blockaid and Scam Sniffer had already verified the website breach prior to the official announcement by Velvet Capital. Users who validated any transactions on Velvet Capital since April 23, 5:39 am UTC may be affected by this cyber offence. Nikonov advised such users to log a complaint on Discord and share the transaction specifics with the Velvet Capital team for resolution.
Furthermore, Nikonov emphasized that as of 6:50 am UTC, no users reported any losses.
Similar cybersecurity breaches were experienced by DeFi protocols Aerodrome and Velodrome on Nov. 28, 2023. According to blockchain detective ZachXBT, attackers succeeded in escaping with approximately $40,000 in crypto assets.
Published At
4/23/2024 10:10:31 AM
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