Optimism DeFi Protocol Kokomo Finance has left users in a state of shock and dismay after abruptly initiating a rug pull, leaving users of the protocol with losses totaling up to $4 million.
On March 26, blockchain security firm CertiK released an alert regarding Kokoma, a crypto project that suddenly experienced a dramatic price slippage and had its social media accounts and website suddenly go offline. When users attempt to access the project’s website, an error page appears instead.
The incident has caused concern among Crypto Twitter users and the crypto community at large as it is unclear what could have caused the sudden change.
Users pull $4 million rug from Kokomo Finance
CertiK recently revealed that the KOKO token deplorer, address 0x41BE, initiated a malicious attack on the smart contract of a wrapped Bitcoin token (cBTC). The attacker, had access to the code and was likely familiar with its inner workings, exploited the vulnerability. Nevertheless they were able to reset the reward speed, halt the borrow function.
Such an attack is understandably concerning for users of cBTC as it affects their ability to use the token and erodes trust in this particular asset.
As reported by various sources, the founder of Kokomo Finance managed to make away with approximately $4 million worth of funds from unsuspecting users.
The exact details surrounding the event remain unclear, but it appears that Kokomo Finance was unable to keep up with its obligations as a service provider and chose to take advantage of its users instead.
In this case, the developers behind Kokomo Finance simply disappeared without warning or explanation, leaving users with no recourse or ability to retrieve their lost funds. The incident highlights the risks associated with investing in DeFi projects and serves as a cautionary tale for those considering putting money into such protocols.
