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AI Crypto Project ‘Genius’ LPs Lose $1.3 Million in ‘Fake Tokens’ Hack, Suspected in Carpet Theft
A fake version of the AI-crypto Genius project token, WILDEBEESTwas used Sunday to drain Uniswap liquidity providers of $1.3 million.
The attack involved creating an identical token on the Fantom blockchain, where no official version of GNUS had yet been implemented.
After cloning the GNUS token to contract on Fantom, the attacker bridged 100 million fresh coined tokens through theirs Ethereum address using the Axelar bridge.
Finally, GNUS tokens were sold into Uniswap’s existing liquidity pool, draining the 407 ETH (which was worth $1.3 million at the time).
The Genius team recognized the attack via X (formerly Twitter). The CEO later pointed to a compromised development portfolio “during a Discord hack.” This apparently “allowed [the hacker] to launch the exact address on FTM of the Axelar Token Minter Manager contract” which allowed the fake tokens to be minted as authentic on Ethereum and Polygon.
The sell-off sent the price of GNUS plunging more than 95%, from $22.86 to $0.79, according to data by CoinGecko.
A security researcher he underlined that the incident is not technically a “hack” of Genius smart contracts, as the stolen funds were taken from the liquidity providers (LPs) of the Uniswap pool via a standard swap, rather than from the platform itself.
Another researcher suspicious the incident was a premeditated “rug pull,” a way for the team to steal funds from LPs by making it appear that a hacker was responsible.
The CEO States that a total of $1 million will be added back to the liquidity pool to try to support the price of GNUS, “once we are confident that it cannot be hacked again.”
To know more: ZKasino $30 Million “Favour” to Users: Seamless Transition or Pull Pull?
Ghost chain
Fantom, once among the best contenders for its role as the “ETH killer” during the last cycle, has since seen its fortunes fade.
Fantom reached its peak in early 2022, when it boasted over $7 billion in total value locked (TVL). This figure has since dropped to just $120 million, ranking 37th on DeFiLlama list of the largest blockchains.
Last year, problems with Multichain, Fantom’s main bridge, further exacerbated the problems. First voicesThen he confirms of Multichain’s CEO passing away led to many stablecoins being depepped and assets “wrapped up”, as the fate of their collateral remained unclear.
The Fantom Foundation has since pursued partial recovery of the lost assets through legal action in Singapore, where it recently traveled granted a default judgment against Multichain.
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