Binance Recovers $345,000 (99.9%) of Stolen Funds in a DeFi Exit Scam

The leading cryptocurrency exchange Binance has helped recover almost all $345,000 funds stolen due to an exit scam conducted by an automated market maker (AMM) dubbed Wine Swap.

Binance Security Team Recovers 99.9% of Stolen Funds

In a press release shared with CryptoPotato, the popular exchange shared that Wine Swap launched on Binance Smart Chain as an AMM platform on October 13th, 2020. However, just an hour after the product release, the team behind it “pulled the rug,” taking over $345,000 in customer funds.

Binance identified Wine Swap’s team only by their on-chain BSC addresses and saw a total of 19 different tokens sent to 119 different addresses.

“When the exit scam was executed, funds remaining in the contract (0xa1eaB5F255DD77fED0D8ea81748422ca7ab0eDc4) were transferred to the creator’s address (0x4BA023aA9196a354C008aD595F67e268420b7005)” – reads the statement.

Binance’s security team followed the transactions and noticed a small portion ending on two digital asset exchanges. By this point, almost all funds were already converted into stablecoins, Binance Coin (BNB), Ethereum (ETH), and Chainlink (LINK).

On October 14th, the security team identified and contacted the scheme’s perpetrator. According to Binance, the undisclosed scammer was “quick to cooperate in an attempt to avoid the impending consequences.”

As such, the security team worked together with the perpetrator and recovered 99.9% of the $345,000 initially stolen. The exchange asserted that the funds had been reconverted to the original tokens, and all affected users will receive them within the next several days.

Lessons To Learn

The Binance statement highlighted several takeaways from the development described above. The decentralized finance (DeFI) ecosystem has been booming in the past several months. However, this massive growth has made it difficult to “verify the legitimacy of each and every project.”

Although the security team promised to tackle each challenge, it urged investors to be even more cautious in their research before allocating funds into various projects.

Despite the successful recovery of the Wine Swap funds, the post also admitted that similar happy endings with scams are “very rare.”

Lastly, Binance outlined the crucial roles of its security and finance teams and the two exchanges that froze the funds from the scam.

Source: Crypto Potato