Defrost Finance has been Exploited, Rumors Claim it was Rugged

Defrost Finance, a decentralized finance protocol, reported being hacked on December 23. However, blockchain security firm Peckshield suggested the ‘hack’ may have been a scam that duped investors off $12 million, claiming “community intel.” 

The Defrost team claimed in a tweet thread on December 25 that a first attempt used a flash loan to pull money from its V2 product. 

The owner key was utilized in a second, more significant attack to take advantage of V1. Peckshield’s analysis said that the attack made use of a fake collateral token and manipulated pricing.

Defi Llama data reveals the total amount of money held on Defrost Finance, which peaked at $95 million in February, has recently been around $13 million. By December 25th, it had decreased to $93,000.

Nonetheless, it would be odd, if the incident proved to be a rug pull. Normally, the group responsible for the scheme disappears and cannot be reached. Defrost Finance, on the other hand, tweeted about the incident and stated that it would be open to negotiating a return of the assets with the criminal.

Cryptocurrency security company Certik tweeted on December 26 that it had tried “to contact multiple members of the team but have had no response” because the account’s direct messaging function had been deactivated.

 DeFiYield, which provides security to investors, claimed to have audited Defrost Finance a year ago and identified the smart contract flaw that was exploited in the breach.

Rug Pulls Continue to Scam Investors

Last year, due to rug pulls, crypto investors saw a loss over $2.8 billion. A last year’s November report states that SnowdogDAO (SDOG), the first meme coin on Avalanche Network, experienced the biggest rug pull on the platform after its price fell by over 90%.

 Additionally, It was reported in November this year that Gala Games, a blockchain-based gaming company, said that “everything is fine” after rumours of a billion-dollar rug pull became public.