Recently Defrost Finance was hacked which triggers losing $12 Million in a short period of time. Is it just a hack or an inside job as part of an exit scam? People are going through a hard time in this bear market. They have already lost a lot of money in crypto.
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Looks like hacks, exploits, rug pulls and exit scams will not stop any time soon. One of the reasons, people point fingers at crypto in a negative way is there are many scams, dramas, and exploits.
Decentralized Finance (DeFi) is supposed to be decentralized, but you may see most of the time, it's highly centralized in disguise of decentralization. They have the access to manipulate and change for their own benefit.
In Defrost Finance, some users complained about losing their crypto which was unusual. Defrost Finance team confirmed that Defrost V2 was hacked and that's the reason, users were losing their cryptocurrencies. They shut down Defrost V2 to investigate further.
In the beginning, Defrost Finance team stated that Defrost V1 was okay and was not affected by hacks, so there is nothing to worry about in Defrost V1. Later, hackers hacked Defrost V1 by stealing the admin key. Strange! The team should be more careful when Defrost Financ V2 was hacked.
How did the hackers manage to get the admin key to exploit and hack again? Defrost Finance team was working on it that can be best for the users. Then it appears that they wanted to negotiate with hackers so that hackers return the funds. That's the best thing they can do seeing exploits one by one.
Luckily, hackers were happy to negotiate, and the Defrost Finance team negotiated with hackers involved in hacking Defrost V1. So the stolen funds were returned. The way everything was happening raised a lot of questions. Is this an inside job as part of an exit scam?
The drama begins. Defrost Finance team denied all accusations and what happened is a flash loan attack. The team is very upset about the accusations and warns to ban members from the Telegram group who accuse them responsible for the exploits and attacks.
DeFiYield, a web 3 security, and DeFi Investing Platform revealed that all drama of Defrost Finance is a rug pull. Will bad actors get away with doing everything to exploit and steal people's money?
So what do you think? Please feel free to leave your comments. Thank you for reading this post. That's it for now. I'll be back with another post.
Image Sources: 1, and 2.
References: 1, and 2.
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Posted Using LeoFinance Beta
It's definitely a concern and I think it's something people have to consider going forward. The trust in a platform is going to be important and that is why I choose to go into CUB but not other defi apps.
Posted Using LeoFinance Beta
If DeFi gets into scams and rug pull, that's concerning. People will be more careful and only legit DeFi would do well in the long run.
Thanks and Happy New Year, @jfang003!
Posted Using LeoFinance Beta
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