By Hassan Mehmood (Saudi Arabia)
SafeMoon officials recently informed investors about the ongoing investigation into the recent hack attempt on the platform. The DeFi protocol is also facing charges from the SEC for security violations and fraud. The project has retained that it is examining the situation and working on a resolution.
The official account SafeMoon on X informed the users about the updates on the matter and assured the investors about implementing preventive measures. The project intends to enhance security and continue its mission.
SafeMoon Lost $8.9 Million in a Hack Attack
SafeMoon underwent a hack attack in March that led to the loss of $8.9 million in BNB coins. Analysts have traced the capital streaming through various centralized exchanges.
Analytics firm, Match Systems, has retained that law enforcement officials are probing into the trail of these transactions. The project noted that they are monitoring the current news and processing these matters with serious deliberation.
Hackers Exploit Smart Contract Vulnerability
Match Systems reported that hackers took advantage of smart contract vulnerability. On this account, they breached the Bridge Burn feature and invoked the burn feature for SFM token on any address.
Also read:This resulted in sending 32 billion SFM coins out of the liquidity pool to deployer address. As a result the token prices underwent a big price leap. The attackers then exchanged SFM tokens for BNB as high prices. In this manner, they were able to add 27,380 BNB tokens.
Match System report informed that smart contract vulnerability was not present in the previous versions and was added as a result of an update on 28th March. The attackers launched the attack on the same day of the update implementation. This has led to suspicions about the involvement of an insider working with the scammers.
On the other hand, attackers retained at first that the exploit happened on account of an accident and wanted to establish communication channels to return 80% of the funds.
Department of Justice Arrests SafeMoon Officials Following SEC Lawsuit
Department of Justice has arrested the CEO John Karony and CTO Thomas Smith of SafeMoon. The execs were charged with withdrawing more than $200 million in luxury cars and homes from investor funds.
On the other hand, the investors were informed that their funds were locked. DOJ has also issued an arrest warrant for Kyle Nagy, the founder of SafeMoon who is still at large. DOJ officials took the action following charges brought by SEC about funds misappropriation. SafeMoon is also mentioned in the digital currency lawsuits issued by Morrison Cohen Litigation Tracker.
The list consists of crypto lawsuits brought by SEC, CFTC, and DOJ since 2022. Other lawsuits on the list include SEC versus Barksdale, DOJ versus Lichtenstien and Morgan, and Thayer versus Matt Furie.
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