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Blockchain Base Faces Fraud

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ByMarcel Bich

Sep 9, 2023
Marcel Bich
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SwirlLend, a second-layer protocol team on the Base blockchain, has vanished, taking away $460,000 in user deposits, as reported by blockchain security firm PeckShield.

Promoting itself as a high-yield “pharming” platform for Ethereum-based cryptocurrencies, SwirlLend attracted users with promises of substantial annual interest. While the exact details of the incident weren’t provided, PeckShield suggested a “rug-pooling” scheme, wherein attackers inject liquidity into the coin, withdraw assets, and disappear with the funds.

Analysis reveals the lending protocol’s total locked value plummeted from $784,000 to a mere $49. Allegedly, the project extracted $290,000 from the Base network and around 94 Ether (ETH) (equivalent to $170,000) from the Linea network to Ethereum.

Adding to the suspicion, SwirlLend’s Twitter and Telegram accounts have been deactivated. The project’s website, which was operational days ago, is also inaccessible, aligning with signs of fraudulent activity.

Beosin Alert disclosed that the project’s privileged addresses borrowed over 230 ETH from the protocol’s credit pools, exchanging 47 ETH through SwirlLend’s SWI tokens. The scammers subsequently funneled the pilfered funds into the Tornado Cash cryptocurrency mixer.

Recent Hacks and Exploit Concerns

In another incident, the RocketSwap blockchain project fell victim to a hack, resulting in a loss of 471 ETH. PeckShield’s analysts revealed that the hacker moved the stolen assets from Base to Ethereum, generating 90 trillion LoveRCKT tokens. The tokens were sent to Uniswap along with 400 of the 471 pilfered ETH.

Responding to the attack, the RocketSwap team outlined plans for recovery. They intend to deploy a new farming contract, relinquishing mining rights and initiating contact with the hackers to negotiate the return of the stolen funds.

Meanwhile, LeetSwap, a decentralized crypto exchange on Base, temporarily halted trading due to concerns about an exploit. The project temporarily suspended trading to investigate potential compromise of the pool’s liquidity.

PeckShield’s data revealed around 340 ETH (approximately $630,000) was utilized in liquidity pairs on Base, enabling the hacker to seize roughly $630,000 worth of ETH from various liquidity token pairs on the decentralized exchange (DEX).

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Marcel Bich

Marcel ‘s passion for the world of cryptocurrencies and his comprehensive knowledge of blockchain technology make him an invaluable asset to our team. He stays updated on the latest trends, regulations, and emerging technologies in the crypto space, ensuring that our audience receives accurate and up-to-date information.