Wine Swap, a yield farming platform launched on the Binance Smart Chain and indirectly backed by the largest cryptocurrency exchange in the world, nearly pulled off an exit scam of $350,000 before Binance recovered the funds, according to a report released by Coindesk. The project was made available last month for fundraising, and strangely enough, within the first hour, a malicious actor decided that fleeing with the money was a smart choice.
The funds raised went into Wine Swap’s wallet address and a single individual then moved these funds, comprising 19 different crypto assets, into a personal wallet address. Binance noted that the funds went from the Binance Smart Chain, to the Binance Chain and finally onto the Ethereum network.
Thereafter, the individual converted the stolen assets into BNB, ETH and stablecoins, but before they could liquidate these assets, Binance managed to convince them to return the funds to the exchange. The next step for Binance is to return the stolen funds back to the supporters affected by the scam.
Infamous decentralized exchange Sushiswap, which was created as an enhanced version of leading DEX Uniswap, saw one of its core developers Chef Nomi abruptly liquidate $14 million worth of Sushi tokens within a week of the project going live, leading to accusations by the community that Chef Nomi was attempting to pull an exit scam.
The nature of DeFi projects already puts its investors and community at risk as they do not need to provide as complete a set of documentation as regular projects in the crypto space do. For example, project teams, creators and developers need not verify their identity, provide proof of code audits or even release a whitepaper for a project and its corresponding tokens to go live on a platform for trading. This means that malicious actors only have to commit minimum efforts for maximum rewards should they decide to pull off an exit scam.
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