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DeFi Lending Protocol on Bitcoin Network Steals $1 Million from Customers

May 26, 2023
DeFi's Bitcoin (BTC) network lending protocol stole $1 million from customers

A DeFi lending protocol running on the Bitcoin network, known as Ordinals Finance, reportedly stole $1 million from its customers before deleting all of its social media pages.

The fraudulent activity was uncovered by CertiK, an analytical platform. This serves as a warning to investors about the risks associated with decentralized finance projects and highlights the need for caution when investing in them.

The social media pages of Ordinals Finance, a DeFi lending protocol operating on the Bitcoin network, have been deleted, and the website has been shut down. After news of the $1 million scam broke, the value of the Ordinals Finance token (OFI) plummeted by 95% to $0.0001, according to CoinMarketCap.

CertiK reported that the token issuer used privileged access rights to withdraw 269 million OFI from the smart contract for OEBStaking, then quickly converted it to ethereum (ETH). The stolen cryptocurrency, worth about 550 ETH, was later transferred to a Tornado Cash address for laundering.

The Rise of Crypto-Related Crime

The address that carried out the scam was funded through the OKX cryptocurrency exchange, according to PeckShield. This incident highlights the need for caution when dealing with DeFi projects and emphasizes the importance of due diligence before investing in any cryptocurrency project.

Ordinals Finance, a decentralized lending protocol based on the Bitcoin blockchain, has been revealed as a scam that stole $1 million from its customers. The protocol claimed to be transparent and reliable, with auditors including BlockSafu and FreshCoins.

However, the platform was used to withdraw 269 million OFI tokens from the smart contract for staking OEBStaking, which were then quickly converted to ETH and sent to a mixer address for laundering.

This incident serves as a reminder of the risks associated with investing in DeFi projects. In the first quarter of 2023 alone, cryptocurrency investors lost $418.5 million due to hacker attacks, with the majority of these attacks targeting the DeFi market. Only 0.4% of successful attacks were against centralized sites. Hundred Finance was also hacked, resulting in $7 million in losses, and was attacked again in 2022 through Gnosis Chain.

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