$4M ‘exit scam’ suspected as Kokomo Finance flies off radar, token plunges

Optimism-based lending protocol Kokomo Finance has been suspected of a $4 million “exit scam” that has seen consumer funds plucked out from the platform by way of a wise contract loophole.

Blockchain safety agency CertiK alerted its followers to the “exit scam” in a March 26 Twitter publish, noting that the Kokomo Finance (KOKO) token has plummeted 95% in worth in a matter of minutes.

CertiK additionally famous that Kokomo Finance eliminated all social media accounts instantly following the alleged rug pull too.

Kokomo Finance has both deactivated or deleted its Twitter account. Source: Twitter

CertiK mentioned the deployer of KOKO attacked the good contract code of a wrapped Bitcoin token, cBTC, by resetting the reward velocity and pausing the borrow perform.

After that, an deal with starting with “0x5a2d..” permitted the brand new cBTC good contract to spend over 7000 Sonne Wrapped Bitcoin (So-WBTC).

The attacker then known as one other command to swap the So-WBTC to the 0x5a2d deal with, which produced a $4 million revenue, in response to the safety agency.

Changes to the good contract code of the KOKO started at about 9 am UTC on March 26. Source: Optimistic Etherscan

A CertiK spokesperson informed Cointelegraph that it was the biggest “incident” that they’ve detected on Optimism.

Kokomo Finance is an open-source and non-custodial lending protocol on Optimism, the place traders may commerce for wBTC, Ether (ETH), Tether (USDT), USD Coin (USDC) and DAI.

Kokomo Finance rose up the ranks rapidly in latest days, with blockchain knowledge platforms like CoinGecko and DefiLlama formally monitoring it shortly after Kokomo Finance went dwell on Optimism on March 25.

The worth of Kokomo Finance token, KOKO fell over 97% at about 4:10pm UTC time on March 26. Source: CoinGecko

Recent screenshots reveal that greater than $2 million was locked into Kokomo Finance previous to it falling greater than 97%.

Over 72% of the full worth locked within the Kokomo Finance protocol got here within the type of wrapped Bitcoin, in response to knowledge from DefiLlama.

Cointelegraph tried to entry all social media and weblog web sites listed on Kokomo Finance’s Linktree web page, nevertheless, all of those hyperlinks now result in some type of an error web page, suggesting the web page has been eliminated.

Related: 7 DeFi protocol hacks in Feb see $21 million in funds stolen: DefiLlama

Cointelegraph got here throughout Kokomo Finance’s good contract audit, which was reviewed and shared by 0xGuard earlier in March.

While most features of the audit have been handed, “typographical errors” have been discovered and the proprietor of the KOKO token was discovered to have a one-time capability to 45% of the utmost provide to an arbitrary deal with.

Kokomo didn’t go all features of its good contract audit, which was reviewed by 0xGuard in March. Source: GitHub

Cointelegraph reached out to 0xGuard for remark however didn’t obtain a right away response.

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