DeFi, or decentralized finance, is now one of the most popular areas of the cryptocurrency industry, and more and more people are starting to join new projects that can often bring in very interesting revenues. However, Meerkat Finance, one of the latest projects launched on Binance's Smart Chain, has drained as much as $31 million causing thousands of users to lose significant amounts of money.
According to the Meerkat Finance team, it was a hacker attack on the smart-contract, although on-chain data seems to suggest that the project's developers are to blame.
Meerkat Finance: what is it?
The Meerkat Finance project is described as a "high-quality project running on BSC platform, being developed for leverage and risk control functions for investors", i.e. a project developed on the BINANCE Smart Chain to offer risk and leverage control functions for investors. Like most DeFi projects, the goal is to allow users to make their money work for them, offering maximum transparency with an acceptable level of risk.
Too bad, however, that when you try to access the official site, you find a "nice" written in which it is said that the project domain is for sale for $ 10,000. Since this is a newly launched project, it seems almost impossible that it could have been attacked by hackers in just 24 hours. The on-chain data, in fact, suggests that the money drain was not due to a breach within the system, but to a real scam by the developers.
What are the suspicions based on?
Of course, thinking that it was the team itself that made as much as $32 million disappear might seem like a bit of a far-fetched thought. However, it seems that it was Meerkat Finance's official distributor account that altered the smart-contract. In fact, the ''rug pull'', or sudden disappearance of funds, can only have happened in two ways: a compromise of the private key of the smart-contract, or an alteration of the core-business by the operators themselves.
Furthermore, the disappearance of Meerkat Finance's official website and their Twitter profile leads one to believe that everything was contrived to pretend that the ''rug pull'' occurred due to a hacking attack by third-party individuals.
Still, a representative of the Binance team announced within Meerkat Finance's Telegram group that, having noticed an anomaly within the project, they started investigating together with Certik, Slowmist and Peckshield, companies that specialize in reviewing similar assets.
The representative also stated that since Binance Smart Chain is a totally open-source system, funds will be blocked the moment they enter the exchange. However, Binance considers itself exonerated from any responsibility related to the disappearance of the money, as Meerkat Finance is not directly connected to the exchange, like any other DeFi project proposed by the platform.
Binance, in fact, always states very clearly that all new DeFi projects that are launched, besides being high risk, are not directly connected with the exchange. However, the developers have added a link where you can view the progress of the scam in real time, offering all victims the chance to keep up to date to understand where their funds have gone. A special Telegram group, called Meerkat_Rugpull, has also been created within which you can communicate with other users who have been scammed.
Conclusions
This is not the first time that a scam attempt has occurred within the Binance Smart Chain. Just think of the case of Wine Swap, a situation where the Binance team managed to block funds worth $344,000.
However, the case of Meerkat Finance, even though it is still under development, seems to have succeeded, representing the biggest scam within the Binance Smart Chain.
This is proof that no matter how interesting and profitable DeFi projects can be, the risk behind any investment is always very high.
For this reason, our advice is always to inform yourself well before joining a new project and, above all, to keep your distance from "minor" DeFi platforms.
In addition, as always, we always suggest to keep up to date, so as to avoid losing large sums of money.
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Learn More
- https://theledger.it/guide/guida-allutilizzo-di-binance/
- https://theledger.it/guide/defi-finanza-decentralizzata/
- https://theledger.it/news/tecnologia/defi-le-previsioni-di-paul-brody-per-il-2021/
Bibliography
- https://www.theblockcrypto.com/linked/97082/rug-pull-defi-meerkat-31-million
- https://www.coindesk.com/defi-project-meerkat-raises-eyebrows-with-claimed-31m-hack-a-day-after-launch
- https://coingape.com/bsc-project-meerkat-finance-allegedly-rug-pulls-nearly-32-million-in-busd-bnb/
- https://meerkat.finance/
- https://twitter.com/WuBlockchain/status/
- https://twitter.com/MeerkatFinance
- https://it.cointelegraph.com/news/
- https://community.binance.org/topic/4002/report-meerkat-finance-here
