Rug Pulled on Users as DeFi Project Meerkat Finance Disappears Along with $31 Million
Just a day after the launch of the project on Binance Smart Chain, the DeFi project reported a hack, suspected to be a rug pulling, resulting in the loss of 13.96 BUSD and 73,653 BNB.
Decentralized Finance (DeFi) project Meerkat Finance claims to be drained for $31 million in digital assets just a day after launching on Binance Smart Chain (BSC).
The team announced through its Telegram channel that its smart contract vault was compromised, which has resulted in the loss of 13.96 BUSD and 73,653 BNB. Both of these are Binance tokens.
However, it is speculated that instead of a hack, the Meerkat Finance team has pulled the rug. According to on-chain data, the original Meerkat deployer’s account was used to alter the smart contract that contains the project’s vault business logic, which means either the project did so itself or its private key was compromised.
Adding to the exit scam suspicions is the disappearance of Meerkat's Twitter profile and website.
Binance is reportedly monitoring the situation and plans to freeze any related funds that move to its exchange. The exchange is also asking the victims to report their issues on “Report Meerkat Finance here.”
Binance Smart Chain has emerged as an alternative to the Ethereum network as high fees make the second-largest network unusable to small users. This has the usage of BSC increasing with the unique wallets and transaction volume surpassing Ethereum last month, as per Dapp Radar.
Compared to more than 67k unique wallets and $181 billion in transaction volume at the end of Feb. on the Ethereum mainnet, there were over 108k and $700 billion wallets and volume reportedly respectively on BSC. Mira Christanto, a researcher at Messari noted,
“High gas prices and $100 million funding from Binance has propelled BinanceSmartChain's TVL to be 25% of Ethereum.”
Several popular DeFi projects have also announced their plan to deploy on BSC or already gone live, including ALPHA, 1INCH, CREAM, DODO, FARM, LINA, REEF, SFI, and SXP.
With increased activity on BSC, it partnered with CertiK Foundation, a decentralized security solutions, and audit provider. CertiK Foundation tweeted on Wednesday,
“A rapid rise in BSC development and utilization calls for an equal response in blockchain and DeFi security. We are here to answer that call.”