The Swaprum incident: Audited DeFi protocol dupes investors out $3m

TL;DR Breakdown

  • Decentralized exchange Swaprum reportedly made off with $3 million in investor funds.
  • Auditing firm CertiK, which audited Swaprum’s protocols, is facing scrutiny for potential oversight.
  • The incident has drastically dropped the value of Swaprum’s token, SAPR, impacting retail investors.

Yesterday, a shockwave passed through the decentralized finance (DeFi) industry as Swaprum, a decentralized exchange based on the Arbitrum blockchain, allegedly made off with about $3 million of investor funds. Swaprum, known for promising potential annual percentage yields up to 100% and offering high farming rewards and low swapping fees, recently attracted over 22,000 wallets holding the protocol’s token, SAPR.

DeFi investor, Damicale Shilling, was the first to sound the alarm after observing an alarming pattern of on-chain activity tied to the protocol’s promotional efforts. DeFi Security, a security firm, soon validated the concerns, confirming that Swaprum’s developers’ theft was underway, initially estimating the losses at around $1 million.

As the day ended, blockchain security firm PeckShield revised the estimated loss, placing it at $3 million. The devious culprits exploited the privacy protocol Tornado Cash, a service designed to obscure the traceability of funds, to launder the stolen loot.

A flawed audit and the fallout

The fallout from the rug-pull incident has been swift and devastating. The value of SAPR has plummeted almost entirely, leading to widespread concern amongst the retail investors who were the primary holders of the protocol’s token.

In the aftermath of the incident, attention has quickly turned to CertiK, the smart contract auditing firm that signed off on Swaprum’s protocols. CertiK’s role in auditing Swaprum has highlighted the importance of robust smart contract audit standards, a point emphasized by Dyma Budorin, CEO of blockchain security firm Hacken.

Budorin remarked, “The lack of smart contract audit report standards leads to such lame rugs.” However, the story might not be as straightforward as it initially seems. It appears the Swaprum developers exploited an upgradability feature left in their smart contract to drain user funds – an issue that was not picked up in the audit report.

The credibility of smart contract auditors is again in the spotlight, as this incident follows last month’s rug-pull event involving the protocol Merlin, which lost $1.8 million despite having recently passed a CertiK audit. Such incidents underline the necessity of establishing an infrastructure layer that consolidates comprehensive security information on all projects, thereby helping to guard against such fraudulent activities.

CertiK’s website has flagged Swaprum as an exit scam. Also, Swaprum’s social media accounts have disappeared, leaving a chilling silence where a bustling exchange once stood. The DeFi community now waits for answers and actions to prevent similar occurrences in the future. After all, the reputation and trust that underpin the DeFi landscape are at stake

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

文章来源于互联网:The Swaprum incident: Audited DeFi protocol dupes investors out $3m

Disclaimers:

1. You are solely responsible for your investment decisions and this info is not liable for any losses you may incur.

2. The copyright of this article belongs to the writer, it represents the writer's opinions only, not represents the site's ones. Not financial advice.

Previous 2023年5月21日 11:03
Next 2023年5月21日 12:00

Related articles

  • Ledger boosts user confidence with open-source transparency for enhanced wallet security

    TL;DR Breakdown Ledger promotes open-source transparency to enhance wallet security. Ledger plans to open-source its software and infrastructure, allowing users and developers to scrutinize the technology and identify vulnerabilities. The move is a proactive step to mitigate the “Ledger recovery” attack. Recently, the popular cryptocurrency wallet provider, Ledger, has announced its commitment to promoting open-source transparency. The company aims to alleviate concerns regarding the security of its wallet and reassure users about the safety of their digital assets. Ledger has long been recognized as a leader in the crypto space, offering hardware wallets that enable users to store their digital currencies securely. However, recent reports of compromised user data and the potential for unauthorized access to funds have raised concerns among the crypto community. To address these concerns, Ledger plans to open-source its software and infrastructure. The company aims to enhance transparency by adopting an open-source approach, allowing users and developers to scrutinize the technology and identify any vulnerabilities or weaknesses. This move is expected to instill greater confidence in Ledger’s security measures and bolster trust among its user base….

    Article 2023年5月25日
  • Crypto Shakeup: Jim Cramer’s Warning Spurs Binance Exodus, Yet Bitcoin Defies Odds

    TL;DR Breakdown CNBC’s Jim Cramer urges investors to remove their cryptocurrency from Binance following SEC charges, raising concerns about the exchange’s future. Despite the warnings, Bitcoin’s price shows resilience and rebounds, defying regulatory uncertainties and the ongoing scrutiny in the crypto industry. The cryptocurrency world has been rocked by recent developments as the U.S. Securities and Exchange Commission (SEC) files charges against two major players in the industry. Binance, one of the leading cryptocurrency exchanges, and Coinbase, a prominent platform, now find themselves in the crosshairs of the SEC’s regulatory actions. The charges allege deceptive practices, conflicts of interest, and violations of securities laws, sparking concerns and debates within the crypto community. As investors and enthusiasts closely monitor the outcomes of these lawsuits, the future of these exchanges hangs in the balance amidst a broader discussion on cryptocurrency regulation. Contents hide 1 Jim Cramer Urges Investors to Remove Crypto on Binance 2 Bitcoin Price Recovers Amidst Regulatory Concerns Raised by Jim Cramer 3 SEC Expands Scrutiny, Files Lawsuit Against Coinbase 4 Conclusion Jim Cramer Urges Investors to Remove Crypto on…

    Article 2023年6月12日
  • Google Cloud expands Web3 focus, eyes new products and partnerships

    TL;DR Breakdown Google Cloud plans to launch more Web3-focused products and support Web3 startups. The company is exploring Web3 technologies with financial services and gaming sectors. Google Cloud’s Web3 startup program offers benefits like $200,000 in credits and technical support. Description Google Cloud plans to introduce more Web3-focused products to make its computing offerings the first choice for industry firms and developers. This move follows the recent launch of a startup program aimed at supporting players within the Web3 segment. The tech giant’s cloud computing services unit will continue to build services similar to its Blockchain … Read more Google Cloud plans to introduce more Web3-focused products to make its computing offerings the first choice for industry firms and developers. This move follows the recent launch of a startup program aimed at supporting players within the Web3 segment. The tech giant’s cloud computing services unit will continue to build services similar to its Blockchain Node Engine, according to James Tromans, Google Cloud Web3 head. Helping customers become transformational players in the Web3 ecosystem is now a core part of the…

    Article 2023年7月24日
  • Stanford University intends to refund $5.5M received from the FTX foundation

    TL;DR Breakdown Allegations suggest that the FTX founder’s family rerouted company funds to Stanford University, prompting the institution to consider refunding $5.5 million. Beyond Stanford, the Metropolitan Museum of Art also plans to return substantial donations from FTX, emphasizing the widespread impact of FTX’s financial controversies. Description In a rapidly evolving situation that interweaves the worlds of cryptocurrency, academia, and art, Stanford University and the Metropolitan Museum of Art have found themselves entangled in the financial web spun by the once-prominent crypto exchange, FTX. Allegations of fund rerouting by family members of FTX’s founder have thrust the entities into the spotlight, prompting … Read more In a rapidly evolving situation that interweaves the worlds of cryptocurrency, academia, and art, Stanford University and the Metropolitan Museum of Art have found themselves entangled in the financial web spun by the once-prominent crypto exchange, FTX. Allegations of fund rerouting by family members of FTX’s founder have thrust the entities into the spotlight, prompting a deep dive into the nature and intent of donations made.  Contents hide 1 The background: Ties between Stanford and…

    Article 2023年9月20日
  • Crypto crisis: Altcoins hit with $100 billion losses

    TL;DR Breakdown Altcoins face significant losses, triggered by legal actions against crypto exchanges. Over 50 cryptocurrencies worth $100 billion are now scrutinized as securities by the SEC. Major altcoins Solana, Polygon, and Cardano saw values drop between 23% and 32%. The SEC’s classification could hinder altcoin’s abilities to gain US funding, impacting development. Turmoil is swirling through the altcoin world as the value of this sector of cryptocurrency faces substantial losses. Amid growing uncertainties and legal hurdles, altcoins, an umbrella term for all cryptocurrencies excluding Bitcoin and Ether, are encountering a rough patch with the prices of numerous tokens taking a significant hit. Mounting altcoin crisis Legal proceedings instituted by US regulators against prominent exchanges such as Coinbase and Binance have put the altcoin market under significant pressure. Consequently, more than 50 cryptocurrencies, collectively valued over $100 billion and representing approximately ten percent of the market, are now under scrutiny by the SEC. Prominent players like Solana, Polygon, and Cardano have witnessed a decline in their value ranging between 23% and 32%, according to CCData. The potential implications of these…

    Article 2023年6月16日
TOP