Mar 2023 - Kokomo Finance Lending Protocol Exit Scam - $4m (Global)
"Kokomo Finance [was] an open source and non-custodial lending protocol on Optimism and Arbitrum."
"Kokomo Finance, an open source and non-custodial lending protocol. Enter http://kokomo.finance to lend, borrow and earn $KOKO here. A 14-days genesis mining starts now with a decent APR!"
"Hola Degen! After a long research, found a permission-less lending protocol to help the user to lend and borrow digital assets. The name of protocol is - @KokomoFinance which is built on @optimismFND Now lets jump to some depth of this protocol"
"The project’s audit, conducted by 0xGuard, covered just the token contract, rather than the protocol at large."
"1/ The deployer of KOKO Token, address 0x41BE, deployed attack contract cBTC. Then set the reward speed, paused the borrow and set the implementation contract into a malicious one.
2/ Address 0x5a2d… approved the cBTC contract to spend the 7010 sonne WBTC.
3/ Since the implementation contract has been upgraded to the malicious cBTC contract, the attacker called 0x804edaad method to transfer sonne WBTC to address 0x5C8d.
4/ Finally, the address 0x5C8d.. swapped 7010 sonne WBTC to 141 WBTC (~4M) for profit."
"The lending protocol had launched on Optimism less than a week ago, and its token, KOKO, less than 36 hours before the rug."
"Kokomo Finance took off with approximately $4M, deleting their website, Twitter, GitHub and Medium in the process."
"Wrapped Bitcoin deposits were rugged via changes made by the project’s deployer address. Almost $2M of tokens still remain in the project’s pools on Optimism.
But with the contracts paused and users unable to withdraw funds, the question remains…
…will they be back for the rest?"
"Whatever the future holds for Optimism, one thing’s for certain:
Kokomo has flatlined."
Further Analysis
Kokomo Finance was a newly launched open-source and non-custodial lending protocol built on Optimism and Arbitrum. It allowed users to lend and borrow digital assets, and its token KOKO had a 14-day genesis mining program. The protocol's audit, conducted by 0xGuard, only covered the token contract, not the entire protocol. Within a week of its launch, the protocol was exploited, resulting in the loss of around $4M, and the project's website, Twitter, GitHub, and Medium accounts were deleted. The attacker targeted the wrapped Bitcoin deposits, and even though $2M of tokens still remain in the project's pools on Optimism, the contracts are paused, and users can't withdraw funds. Kokomo Finance is unlikely to recover.
How Could This Have Been Prevented?
More Cryptocurrency Exchange Hacks/Scams/Frauds
Jairo Martinez Cryptocurrency Scam Victim > > < < Harvest Keeper KYC/Audit Rug Pull
Sources/Further Reading
Rekt - Kokomo Finance - REKT (Dec 31)
Decoding Kokomo Finance $4 Million Rug Pull Quillaudits (Dec 31)
KOKOMO FINANCE MEGA CRASHED -98%‼️ KOKO TOKEN PRICE TODAY❗ $4M EXIT SCAM SUSPECTED AS KOKOMO FINANCE - YouTube (Dec 31)
Kokomo Finance - DefiLlama (Dec 31)
@Optimism_Space Twitter (Dec 31)
Optimistic L2 Transaction Hash (Txhash) Details | Optimism
(Dec 31)
@DefiLlama Twitter (Dec 31)
@UnoIntern Twitter (Dec 31)
@C4dotgg Twitter (Dec 31)
@moemoea_ Twitter (Dec 31)
@CryptoLeeY Twitter (Dec 31)
@solaceyfeels Twitter (Dec 31)
@ohhellohana Twitter (Dec 31)
@sidenzgiw Twitter (Dec 31)
@OptimismEconomy Twitter (Dec 31)
@ro2noazero Twitter (Dec 31)
@happykiyowokay Twitter (Dec 31)
@Pamungkhaz Twitter (Dec 31)
@0xGuard Twitter (Dec 31)
@0xGuard Twitter (Dec 31)
@CryptoNotifyBot Twitter (Dec 31)
@semqngat Twitter (Dec 31)
@leehc0x Twitter (Dec 31)
@PirotReborn Twitter (Dec 31)
@Cointelegraph Twitter (Dec 31)
$4M ‘exit scam’ suspected as Kokomo Finance flies off radar, token plunges (Dec 31)
Medium (Dec 31)
https://web.archive.org/web/20230328012441/https://github.com/KokomoFinance (Dec 31)
@KokomoFinance Twitter (Dec 31)
Registrant WHOIS contact information verification | Namecheap.com (Dec 31)
Worldwide crypto & NFT rug pulls and scams tracker - Comparitech (Dec 31)
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