Users of DeFi-platform Meerkat Finance suspected the project of one of the varieties of $31 million exit scam.
Something is going on with Meerkat
In the decentralized finance (DeFi) segment, the Meerkat Finance protocol is quite well known as a copy of another project, Yearn Finance (YFI).
The day before Meerkat token MKAT went down in value after speculation emerged that the project was experiencing one of the exit scam schemes, which resulted in the withdrawal of $31 million in assets from the platform.
A tweet published by a Chinese journalist @WuBlockchain reported that almost 14 million BUSD and almost 74 thousand BNB were withdrawn from the platform. At the time, the project team reported a hacking attack on the MKAT vault and the loss of all funds, and the project website was down. As Wu commented, this could be the biggest fraud among Binance Smart Chain (BSC)-based projects.
Someone “on the inside”?
The MKAT repository was reportedly compromised because attackers managed to change the code of the smart contract. Further, the funds withdrawn from the platform were distributed to several addresses. Thus, the Binance Coin (BNB) address “FakePhishing17” received 73,635.23 BNB. Another address received $14 million BUSD in a series of small transactions.
What draws attention is the fact that such changes can be made only with the use of developers’ private keys. This leads many community members to suppose that the developers themselves could be involved in what happened and what happened is nothing else but a “rug-pull” scam scheme, developed by the project team. As part of such a fraud, huge amounts of money are withdrawn from the market, which devalues the value of the assets of other liquidity providers, hodlers and traders.
At this point, however, there is no evidence to support such allegations, and the Meerkat team itself claimed that the hack was the result of an external hacker attack. Since then, however, the situation has not yet received any official clarification.
It’s not a verdict yet
It is worth noting that the DeFi-platform segment has traditionally been a tidbit for hackers. Projects Cream Finance (CREAM) and Alpha Finance Labs (ALPHA) fell victim to them in February.
However, despite the activity of attackers, almost all really successful DeFi projects undergo a similar test of strength. They are able to survive such events and continue to develop.