$4M 'exit scam' suspected as Kokomo Finance flies off radar, token plunges

Optimism-based lending protocol Kokomo Finance has been suspected of a $4 cardinal “exit scam” that has seen idiosyncratic funds plucked retired from the level via a astute declaration loophole.

Blockchain information steadfast CertiK alerted its followers to the “exit scam” successful a March 26 Twitter post, noting that the Kokomo Finance (KOKO) token has plummeted 95% successful worth successful a substance of minutes.

CertiK besides noted that Kokomo Finance removed each societal media accounts instantly pursuing the alleged rug propulsion too.

Kokomo Finance has either deactivated oregon deleted its Twitter account. Source: Twitter

CertiK said the deployer of KOKO attacked the smart declaration code of a wrapped Bitcoin token, cBTC, by resetting the reward velocity and pausing the get function.

After that, an code opening with “0x5a2d..” approved the caller cBTC astute declaration to walk implicit 7000 Sonne Wrapped Bitcoin (So-WBTC).

The attacker past called different bid to swap the So-WBTC to the 0x5a2d address, which produced a $4 cardinal profit, according to the information firm.

Changes to the astute declaration codification of the KOKO began astatine astir 9 americium UTC connected March 26. Source: Optimistic Etherscan

A CertiK spokesperson told Cointelegraph that it was the largest "incident" that they’ve detected connected Optimism.

Kokomo Finance is an open-source and non-custodial lending protocol connected Optimism, wherever investors could commercialized for wBTC, Ether (ETH), Tether (USDT), USD Coin (USDC) and DAI.

Kokomo Finance roseate up the ranks rapidly successful caller days, with blockchain information platforms similar CoinGecko and DefiLlama officially tracking it soon aft Kokomo Finance went live connected Optimism connected March 25.

The terms of Kokomo Finance token, KOKO fell implicit 97% astatine astir 4:10pm UTC clip connected March 26. Source: CoinGecko

Recent screenshots uncover that much than $2 cardinal was locked into Kokomo Finance anterior to it falling much than 97%.

@KokomoFinance is an unfastened root and non-custodial lending protocol built connected Optimism and @arbitrum .
- Launch connected @DefiLlama
- Audited by @0xGuard $KOKO TVL : 2M, is continuously increasing, wealth volition travel into this lending level soon erstwhile it is deployed connected @Arbitrum. pic.twitter.com/RduuHBWX39

Over 72% of the full worth locked successful the Kokomo Finance protocol came successful the signifier of wrapped Bitcoin, according to information from DefiLlama.

Cointelegraph attempted to entree each societal media and blog websites listed connected Kokomo Finance’s Linktree page, however, each of these links present pb to immoderate signifier of an mistake page, suggesting the leafage has been removed.

Related: 7 DeFi protocol hacks successful Feb spot $21 cardinal successful funds stolen: DefiLlama

Cointelegraph came crossed Kokomo Finance’s astute declaration audit, which was reviewed and shared by 0xGuard earlier successful March.

While astir aspects of the audit were passed, “typographical errors” were recovered and the proprietor of the KOKO token was recovered to person a one-time quality to 45% of the maximum proviso to an arbitrary address.

Kokomo did not walk each aspects of its astute declaration audit, which was reviewed by 0xGuard successful March. Source: GitHub

Cointelegraph reached retired to 0xGuard for remark but did not person an contiguous response.

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