Meerkat Conducts Alleged $31M Rug Pull One Day Post Launch

Celebrated Chinese journalist, Wu Blockchain, tweeted about Meerkat Finance’s suspicious activity:

“BSC project Meerkat Finance is suspected of being rug, taking away 13.96 million BUSD, and the other 73,635 BNB. MKAT claimed to be hacked and stole all resources. Currently the project website cannot be opened. This may be the largest fraud project on the binance smart chain.”

MKAT Announces Hack On Telegram

Meerkat Finance (MKAT), is a “yield farming” protocol based on Binance Smart Chain. Meerkat Finance (MKAT) launched on the Binance Smart Chain (BSC) on March 3, 2021, at 7:00 p.m. (UTC). The following day, the team announced news of the attack on its Telegram channel. The team said,

“MKAT has suffered a major attack on Vault contracts, hackers took advantage of a number of vulnerabilities to steal all funds in Vault. We are really desperate!”

The loss reported in Binance tokens is 13.96 BUSD and 73,653 BNB. Reports state that the funds have been further transferred to multiple new blockchain addresses. This has been noted to be a textbook example of a DeFi scam and the largest fraud committed in DeFi history.

MKAT’s Hack Could Be Self-Directed

On-chain data show that the supposed hacker(s) drained the funds altering MKAT’s smart contract that contained the project’s business logic. This was achieved using the MKAT deployer’s account, suggesting that either the deployer’s private key was compromised or the project itself did this. 

Readers may note that such a move is called a “rug pull”, a DeFi-oriented type of exit-scam. Soon after their hack announcement, their Twitter profile and website disappeared, adding to the suspicions that this could be self-directed by MKAT. 

Response From The Binance Team

Binance is monitoring the situation and will be freezing any related funds that move to its exchange. 

A Binance spokesperson said: 

“The joint security team is monitoring the Meerkat Finance situation, If the money flows into the exchange, it will be frozen as soon as possible. BSC is an open-source ecosystem and Binance is not directly connected to projects built on it.”

They have also asked the victims of MKAT’s fiasco to report their issues on a dedicated forum. Binance team’s customer support team has already begun its own investigation. A Binance representative states in the exchange’s official Chinese Telegram Channel that the abnormality is being looked into with auditioning firms Certik PeckShield and Slowmist.

The fraud victims have launched a telegram channel to coordinate and get their investments back. It currently has 135 members and the fraud victims are planning to reach out to Binance to seek protection of their assets. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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