Decentralized finance protocol Safemoon has been the victim of an $8.9 million hack on its SFM/BNB liquidity pool. Safemoon’s CEO clarified the situation by stating that only users of this liquidity pool would be affected and that their tokens were safe.
Safemoon has a liquidity pool emptied
Safemoon, a decentralized finance (DeFi) protocol, suffered an $8.9 million hack on one of its liquidity pools, namely the SFM/BNB pool. John Karony, the CEO of Safemoon, took to Twitter to clarify the situation.
To our valued community,
As you may be aware, on Tuesday 28 March, SafeMoon’s Liquidity Pool was compromised. We have taken swift action to resolve the situation and protect our community. I want to make clear that our DEX is safe. This ultimately affected the SFM:BNB LP pool….
– John Karony (@CptHodl) March 29, 2023
So, according to him, only this pool of cash would be affected, and the users’ tokens would be safe:
“We have located the suspected exploit, patched the vulnerability, and hired a blockchain forensics consultant to determine the precise nature and scope of the exploit. Users need to be assured that their tokens remain secure. With the flexibility of our technology, we are confident that we will be able to resolve this issue. I want to assure you that the other LP pools on DEX were not affected, and that the same is true for our future updates and releases. I also want to assure you that the SafeMoon Wallet, secured by Orbital Shield, remains a safe place to store your crypto. “
How did the hack happen?
According to the blockchain security firm Peckshield, it is an update that would be involved. More precisely, a flaw would have been introduced in the smart contract of the SFM token burn, an operation conducted by the blockchain address corresponding to that of Safemoon, which suggests a theft of administrator key or an operation of a team member.
This would have allowed the manager to artificially inflate the price of SFM using a function in the code, before reselling enough tokens to generate just under $9 million in profit.
Hi @safemoon The upgrade, with the exploited public burn bug, was initiated by the official SafeMoon: Deployer. (Admin key leak?) And here comes the upgrade tx. https://t.co/ffAhm9qhgG https://t.co/KYEiYxMRII pic.twitter.com/9CQhseircP
– PeckShield Inc (@peckshield) March 28, 2023
Let’s also note that the attacker sent an on-chain message to Safemoon’s teams indicating that he was ready to return the funds:
“Hey, relax, we accidentally launched an attack on you, we’d like to return the funds, set up a secure communication channel, let’s talk. “
In any case, Safemoon has, at the time of writing, not released an update regarding this matter. The price of the SFM token fell by about 20% in the wake of the hack, but has now almost caught up with its previous price. However, it is still down 97.2% from its highest price (ATH) reached in early January 2022.
Evolution of the SFM token price from its creation to today
A colossal drop moreover qualified as a rug pull last year, the Safemoon teams as well as the promoters of the project (including Jake Paul and Soulja Boy) having been the target of a lawsuit from 3 plaintiffs.
