$60M Stolen From AnubisDAO Crypto Fundraise

Key Takeaways

  • AnubisDAO, a newly-launched dog-themed crypto project, has suffered an massive attack.
  • 13,556.36 ETH, worth approximately $60 million at the time of the attack, were drained from AnubisDAO liquidity pool.
  • Several community members have suspected the incident could be a rug pull.

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AnubisDAO has suffered from an attack in which an unknown entity stole $60 million from the project’s auction pool.

Funds Drained From AnubisDAO In Suspected Rug pull

AnubisDAO, a newly-launched dog-themed crypto project, suffered a massive attack today. Based on the on-chain data, someone drained $60 million worth of ETH from the project’s launch pools.

Anubis, which is a fork of OlympusDAO, was launched on Copper, a token crowdfunding platform yesterday. It promised to build a community-owned DeFi infrastructure.

Via the Copper platform, the team bootstrapped liquidity pools on Balancer that distributed their native ANKH tokens to investors in exchange for ETH. Twenty hours into the token sale, at around 11:58 am UTC, 13,556.36 ETH, worth approximately $60 million at the time, were drained from the liquidity pool by an unknown entity.

Sisyphus, a core contributor to AnubisDAO, confirmed the attack and said the person who executed it was “either a team member or phishing attack targeting a team member.” This tweet has since been deleted.  Nevertheless, Sisyphus offered a reward of 1000 ETH (about $4.4 million) to identify the person behind the wallet connected with the Anubis attack.

The team claims it is still investigating the attack vector. Meanwhile, the assets from the rug pull event have been transferred into this wallet. The ANKH token price collapsed following the incident.

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Source: Copper

Some community members have alleged the incident to be a rug pull–a scheme in which a crypto project is deliberately intended to steal investors’ funds deposited into liquidity pools. Allegations have been made against a team member who goes by “Beerus,” whom some Discord community members suspect of carrying out the $60 million rug pull. However, this claim is so far unsubstantiated.

Other critics have suggested that the project was likely untrustworthy, as it launched without a website or a whitepaper.  However, the lack of credible information about the team did not prevent people from jumping into the crowd sale. One notable crypto personality, DeFi_Brain, disclosed losing almost half a million dollars in the incident.

Before more details regarding the incident come to light, it is hard to ascertain whether the rug pull resulted from a phishing attack or an inside job, or if some other factor is at play.

This story is still developing.  

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Solana NFT Project Accused of Rug Pull After Lil Uzi Deletes Tweets

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Eternal Beings, an NFT project affiliated with rap star Lil Uzi Vert, has been accused of “pulling the rug” on buyers. Uzi deleted all tweets mentioning the project after the NFTs sold out. 

Eternal Beings Accused of Rug Pull

Yet another celebrity-backed crypto project has run into trouble. 

Eternal Beings, a collection of 11,111 generative alien avatars with a fashion sense similar to hit rapper Lil Uzi Vert, launched on Solana Tuesday. However, after the NFTs sold out, Lil Uzi, who had previously promoted the project to his 8.5 million Twitter followers, deleted his posts, distancing himself from the project. 

Following Lil Uzi’s exit, the floor price for Eternal Beings dropped sharply and is currently well below the 2.5 SOL mint price. 

Despite moderators in the project’s Discord assuring members that Lil Uzi is still “100% part of the project,” others have suggested that his tweets were nothing more than a quick paid promotion. 

Since Lil Uzi has distanced himself from Eternal Beings, holders are also wondering if the project will still deliver on its roadmap promise of an exclusive live performance with backstage access. 

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In addition to causing panic in the 43,000 member Eternal Beings Discord server, onlookers have questioned whether his tweets could implicate him in U.S. securities laws. In one deleted tweet, he commented that the floor price of Eternal Beings would “easily” reach 6 SOL.  

Source: @LILUZIVERT via Wayback Machine

Depending on how involved Lil Uzi is with the project, such a comment could be interpreted as a price guarantee, making the NFTs securities in the eyes of the SEC. 

As NFTs have entered into the mainstream, many celebrities have started using them as a new way of engaging with their fans. Earlier this month, rap superstar Doja Cat launched her first collection of NFTs through OneOf, a dedicated platform for musicians to engage with fans on Tezos.

Disclaimer: At the time of writing this feature, the author owned BTC, ETH, and several other cryptocurrencies. 

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Luna Yield Executes First Major Rug Pull on Solana

Key Takeaways

  • Solana has suffered its first rug pull on Luna Yield, a recently launched high APY yield farm.
  • The anonymous team at Luna Yield has since deleted their website, as well as their social media handles. 
  • The yield farm was incubated by SolPad, a Solana-based launchpad on Aug. 16. 

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Luna Yield, a Solana-based yield farm has carried out what appears to be the first major rug-pull in the burgeoning ecosystem.

Solana Yield Farm Steals $8 Million

Solana, a fast growing blockchain network, has suffered its first rug pull on Luna Yield, a recently launched high APY yield farm.

It appears that the farm’s developers have run off with millions of dollars of investor funds. hoakegani, a Solana developer, first reported the incident. hoakegani’s on-chain analysis suggests that about $8 million worth of crypto assets have been taken out of the Luna Yield pools by the team.

A Solana address that deployed the original contract and signed multiple transactions, transferred $8 million in WBTC, WETH, LUNY and USDT tokens out of the protocol. The yield farm was incubated by SolPad, a Solana-based launchpad on Aug. 16.  According to SolPad, it facilitated the sale of LUNY tokens helping the scammers raise $100,000.

Solpad also confirmed the exit scam on Twitter, saying it was “sorry for any inconvenience.”  SolPad noted it was unable to trace the identity and IP addresses of the Luna Yield team.

The anonymous team at Luna Yield has since deleted their website, as well as their social media handles. 

In response to the incident, SolPad announced a compensation plan using its Foundation emergency funds. However, the compensation will only be available for IDO investors. In a post by SolPad on its Telegram, the team said:

“Although we cannot get back the lost funds stolen by Luna Yield, we will compensate their IDO buyers on SolPad.”

In the last year, blockchain-based yield farms have run off with investors’ funds in exit scams multiple times. These incidents are colloquially referred to as rug pulls in the crypto community. In the past, scammers have set up yield farms on chains with cheap transactions fees such as Polygon or Binance Smart Chain, using high yields to bait novice investors into depositing funds. In the case of Luna Yield, it offered an APY of up to 400% on the SOL-USDC pair, which was enough to attract millions from DeFi investors.

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Solana, a high performance blockchain recently crossed $2 billion in total value locked across various projects.

Due to the ultra cheap and highly scalable transactions, the Solana network could become another target for scammers, especially if projects on the platform are promoted by Solana developers. In the case of Luna Yield, the farm was posted to the Solana website; however, the listing page was deleted after the rug pull. In response, many community members have called for more caution and transparency in the Solana ecosystem to avoid future scams. 

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Beware of ‘soft rugs’ — a growing menace in decentralized finance

The decentralized finance ecosystem has been plagued by a variety of known scams and exploits for some time, with yet another coming in the form of what is known as a “soft rug”.

Those that have been dabbling in DeFi for some time will be familiar with the term “rug pull”. This generally refers to the abandoning of a project by insiders or developers who remove liquidity from pools or vaults on decentralized exchanges and disappear with the funds.

A related malfeasance to plague the emerging financial landscape is the “soft rug” which is where a project’s founders simply dump their own tokens and exit the venture instead of taking control of users’ assets.

In some cases, a soft rug is more insidious with developers going out of their way to build trust and a false sense of security at the same time as attempting to disguise the dumping of tokens. If done cleverly enough, users may not even know they’ve drawn the short straw.

There have been a couple of incidents in the DeFi scene over the past week where soft rug exit scams have been alleged.

The team from Polywhale, a Polygon-based yield farming project, announced that it would be ceasing work on the platform in a Reddit post on June 20. Two days later, it was discovered by token holders that the project’s treasury wallet had been emptied.

As reported by Cointelegraph, Polywhale Finance’s founders were accused of pulling a soft rug by selling their tokens during the latest crypto market price collapse. The project’s native token, KRILL, has collapsed to $0.17 from a high of $7 at the beginning of this month.

Related: Pulling the rug: DeFi investment hype fuels rise in crypto exit scams

The Defiant reported on another claimed soft rug involving Swipe, which developed Binance Smart Chain’s third-largest protocol, Venus.

On June 22, the founding team behind the BSC-based money market and stablecoin protocol announced that they were bailing from the project. Uniswap community member @MonetSupply accused the team of a soft rug on Tuesday.

However, members of the new Venus community denied the allegations, claiming that it was just a rumor and the Swipe team had handed in all of their tokens.

The incident has not prevented the Venus native XVS token from slumping 40% since the same time last week when it traded close to $34. According to CoinGecko, XVS is down 87% from its all-time high of $147 on May 10, changing hands for $19.28 at the time of writing.


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Polywhale Team Abandon $100 Million Project Amid Scam Allegations

Key Takeaways

  • Polywhale Finance, the first yield farm on Polygon, has abandoned the project and withdrawn over $1 million in tokens.
  • The team said they were quitting due to bad tokenomics and poor market conditions, a claim dismissed by others.
  • Community members describe the incident as a “soft rug,” a fraudulent exit scam in which project founders sell own tokens on the market.

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Polywhale Finance, the first-ever yield farm on Polygon has been abandoned by its founding team amid rug pull allegations.

Polywhale: Another Yield Farming Exit Scam?

The team has stated in an official statement that they are moving on due to bad token economics and market conditions.

“We have decided that we will no longer be developing the project for multiple reasons,” the team wrote in their final note amid allegations of an exit scam from community members.

Polwhale statement
Source: Telegram

Even though the team blames its exit on tokenomics, there are indications of malicious intent. The official Telegram chat group has been deleted and there is a consensus among community members that the project was a potential scam.

Community members describe the incident as a “soft rug,” a situation when project founders abandon a project after dumping their own tokens on the market in exchange for stable coins.

Polywhale Finance was launched in April 2021 by an anonymous team. It functioned as a yield farm, offering its users a chance to make incredibly high returns on their deposited funds.

Users could stake various tokens including Matic, Quick and several other tokens to earn as APRs as high as 1000% in the native token called Krill.

Up until last week, Polywhale had a total value locked of over $100 million across liquidity pools as well as other single asset pools.

But the team recently started draining funds from its treasury. A specific transaction shows that the Polywhale team drained over $1 million from the project’s treasury from their meant for future development, and sent them to their own wallets.

“They were draining funds for five days ago while still advertising they were going to add new dev features, it’s not a simple shutdown it’s an exit scam,” one community member told CryptoBriefing.

Soon after the team announced their exit, the price of Polywhale’s native KRILL token crashed from trading at $1.5 on Jun. 18 to now $0.13, according to CoinGecko.

Polywhale is not the only recent scam on Polygon. The ongoing yield farming craze, high amounts of liquidity, and negligible fees has made the network a perfect venue for scammers to thrive.

Over the weekend, two other smaller yield farms, Polycash Finance and Polysa Finance executed soft rug pulls, and dumped native tokens on their users before deleting social media accounts.

Such incidents follow the highly advertised and notorious collapse of Iron Finance, an algorithmic stable coin project on Polygon that suffered from a massive liquidity attack. Several commentators have alleged the Iron Finance incident may have also been a result of a soft rug pull, similar to Polywhale Finance and others.

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Alameda Research, Reef Finance Clash Offers Stark Crypto Warning

Key Takeaways

  • Alameda has cut ties with Reef Finance while sister company FTX accused Reef of being a scam, tanking REEF token by 26%.
  • Reef Finance leaked documents revealing that Alameda had threatened to ruin the project by dumping tokens, delisting it, and discrediting it.
  • It appears that an $80 million business deal fell through due to a miscommunication handled entirely through Telegram with no formal legal contract.

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Days after “investing” $20 million in Reef Finance, Alameda Research refuted all ties with the DeFi project, leveling numerous accusations against it.

Reef Finance, however, reveals a wholly different take. So, what happened?

With screenshots and transcripts now available, the debacle ultimately reveals that $80 million deals are best brokered with legal contracts, not messaging apps.

FTX Denounces Reef as Rug Pull, Alameda Cuts Ties

On Mar. 15, the official Twitter account for FTX accused Reef Finance of being a scam, telling Reef Finance investors that their money was being stolen.

FTX did not respond to Crypto Briefing comment requests and has since deleted the tweet in question.

At around the same time, Alameda trader Sam Trabucco stated that Alameda had no connection to Reef Finance. He characterized the $20 million transaction as an OTC trade rather than a business investment, adding that Reef reneged on their deal and prematurely went to the media about it.

Brian Lee of Alameda’s Venture Capital department retweeted Trabucco’s post.

The claims from Alameda and FTX directly preceded a 26% drop in the price of REEF. Social media erupted with the news that Reef may be a scam and may have invented the story of an Alameda investment to pump its prices.

However, none of these claims offered the full story.

Crypto Briefing has obtained evidence that an investment announcement was carefully co-ordinated between both projects and released at the agreed time. Brian Lee himself greenlit the announcement, including the disclosure of a $20 million investment, on Mar. 10.

On Mar. 12, the announcement was made.

It appears that Alameda then sold some of their REEF, using the Binance exchange rather than their sister company, the FTX exchange.

An OTC Trade, Not an Investment

Alameda and FTX declined to comment, though Trabucco told Crypto Briefing that Alameda’s blog post on the matter constituted his comments.

In the post, Alameda released conversation transcripts of their own. On Mar. 8, it appears that Alameda brokered a deal for $80 million worth of tokens at a fixed price, settling the first tranche of $20 million.

They agreed to market this OTC trade as an investment in Reef Finance.

Source: Alameda Research

Reef wanted to reframe the trade as an investment for the public, saying, I assume it is fine with announcing you guys as a big investor, right?”

20% Token Discount Without Vesting

Speaking to Crypto Briefing, Reef Finance CEO Denko Mancheski stated that the token sell-off was unexpected, believing Alameda would lock up their new holdings until further notice.

Reef Finance sources claim that Alameda bought $20 million worth of tokens at a 20% discount and then tried to squeeze the project for more tokens at discounted prices.

“They said that they are investing long term and wanted to buy $80 million,” said Mancheski. “I sent them offers with vesting schedule but they said they are very reputable and long-term investors and professionals and have bought in even bigger projects even bigger amounts without lockups.”

Crypto Briefing has seen no evidence that Alameda agreed to lock up tokens, and Mancheski claimed to no longer have access to the conversation logs where aspects of the deal were discussed.

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Mancheski stated that Alameda started selling their tokens on Binance “the moment we settled the $20 million,” further claiming that “they are lying that they still own the majority of the tokens.” It certainly appears that Alameda did indeed move tokens to Binance, although how many were sold is unclear.

Alameda transferred reef tokens to binance
Source: Etherscan

“The moment we realized we are getting basically scammed (instead of investing they are lying us and selling the tokens), we decided to stop,” said Mancheski.

This contradicts the quotes posted by Alameda, in which Reef agreed to sell $80 million and merely marketed the transaction as an investment for the public, fully aware that the deal was to broker an $80 million trade in multiple tranches.

Reef shared screenshots indicating that Alameda essentially threatened to ruin Reef Finance.

Threats included to publicly cut ties, dump their holdings and likely impact price, delisting REEF token, and even convincing other exchanges, including Binance, to delist REEF.

The legality of this last threat and of FTX accusing Reef Finance of being a “rug pull” stealing all investor holdings is unclear at this time.

alameda threatened reef finance

Alameda also told Reef that they had notified their legal department, threatening legal action “should this not settle.”

However, it’s difficult to say to what extent legal action can apply to a deal carried out in such a casual, ad-hoc way by both parties.

An $80 Million Business Agreement on Telegram

At the end of the day, while one could argue both sides are guilty of misrepresenting the truth and carrying out shady business practices, the deal fell apart due to a misunderstanding on both sides.

Alameda was supposed to buy $80 million worth of tokens at a discount, and Reef pulled out when Alameda started to sell earlier than expected.

The most noteworthy aspect of this story is that no formal legal agreement appears to have been written up for a deal worth $80 million.

According to Reef, the entire deal was brokered in good faith and through Telegram messenger, and Alameda representatives refused to comment on whether a legal document was in place.

Likely, the contract Alameda refers to in the Medium blog post was simply the written agreement in which Alameda asked Reef to “pls confirm” that an $80 million transaction was on the table. Sometimes written agreements hold up in court, and sometimes they don’t.

“There is literally nothing they can do legally since there was no paperwork,” Mancheski bluntly told Crypto Briefing.

In traditional finance, brokering a deal of this size with no formal legal contract would be unheard of.

In crypto, it’s business as usual.

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Binance Smart Chain DeFi Project Hacked for $31 Million

Key Takeaways

  • A yield farming project on BSC has been hacked for $31 million.
  • The website, twitter account, and telegram channel are all down, suggesting a rug pull by creators.
  • The hackers are using DeFi avenues to move the stolen tokens.

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Vault 1 of the DeFi application Meerkat finance, a clone of  Yearn Finance on Binance Smart Chain, was drained for $31 million this morning. 

Meerkat Finance Hackers Tinker With Smart Contract 

The hackers implemented a change in the ownership of the smart contract address on Meerkat Finance at 9 am UTC. Soon after, they began withdrawing from the smart contract to multiple addresses. 

The hacker’s primary BNB address is identified on the blockchain, tagged as “FakePhishing17” on BSCscan, which received 73,635.23 BNB worth $17.67 million. The remaining $13.9 million in BUSD was sent to other addresses in smaller amounts. 

At press time, the FakePhishing17 address has also moved the BNB to other wallets in seven transactions of 5,000 BNB each, one in 10,000 BNB, one transaction over 23,000 BNB, and other small transactions. 

Numerous users of the platform have reached out on the Binance community page lamenting their losses. 

According to media reports, the Meerkat Finance team made a brief note about the hack in Telegram but have since disappeared from all social media platforms. Their website and Twitter accounts are disabled, and the Telegram group is now deleted too. 

Distressed users have reached out to Binance CEO Chanpeng Zhao, hoping that the CEO can track down the money. CZ has not replied to any comment on Twitter.

Nonetheless, the activity on the hacker addresses shows that the transactions are primarily conducted using DeFi avenues like PancakeSwap instead of moving to a centralized exchange.

Disclosure: The author held Bitcoin at the time of press. 

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Crypto crime dropped 57% in 2020 but DeFi hacks surged: CipherTrace

Crimes targeting the virtual currency sector decreased by more than half in 2020 according to blockchain security firm CipherTrace.

The firm’s 2020 cryptocurrency crime and anti-money laundering report revealed that losses from cryptocurrency theft, hacks, and fraud fell 57% in 2020 to $1.9 billion, due mainly to improved security systems. The same figure in 2019 hit a record $4.5 billion.

CipherTrace said that “massive exit scams” such as the PlusToken Ponzi dominated crypto crime over the past two years, with that scam alone netting $2.9 billion. In 2020, a similar scheme by some of the same culprits called WoToken defrauded investors out of $1.1 billion, accounting for 58% of the year’s major crime volume.

The report found that fraud is the dominant cryptocurrency crime, followed by theft and ransomware. Dave Jevans, CipherTrace’s chief executive officer, told Reuters:

“Thefts from hacks against centralized exchanges continue to decrease as these financial institutions mature and adopt stronger security measures,”

However, 2020 saw a surge in decentralized finance related crime, the majority of which were “rug pulls”. That’s where a token is artificially hyped and inflated, with the creators and early investors pulling the plug after the pump leaving the latecomers out of pocket.

The report explained that some bad actors will liquidate the entire liquidity pool, leaving the remaining token holders with no liquidity and unable to trade, wiping out the remaining value of the token:

“Half of all 2020 crypto hacks were of DeFi protocols—a pattern that was virtually negligible in all prior years—and nearly 99% of major fraud volume in the second half of 2020 stemmed from DeFi protocols performing ‘rug pulls’ and other exit scams in a pattern eerily reminiscent of the 2017 ICO craze.”

Due to being mostly unregulated, DeFi protocols have many exemptions from traditional enforcement regimes that centralized exchanges, money service businesses and banks face, Jevans added.

The report stated that 2020’s largest theft, the $281 million hack of the centralized exchange KuCoin, also involved the DeFi sector as criminals attempted to launder the stolen funds through Uniswap, the world’s largest decentralized exchange.


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