Mysterious party siphons $11.2m in liquidity using the SafeMoon deployer contract
An alarming discovery has been made regarding unusual transactions totaling $11.2 million that are connected to a modified SafeMoon deployer contract. These transactions coincide with the bankruptcy proceedings of the SafeMoon project.
Cyvers Alerts, a cybersecurity firm, has reported that an unknown entity made alterations to SafeMoon’s deployer contract, allowing for the withdrawal of significant amounts of liquidity from multiple pools. At present, this entity holds more than $1.6 million in various tokens, including Wrapped BTC (wBTC), Tether (USDT), and Pepe (PEPE). The remaining extracted liquidity has been transferred to Ethereum, BNB Chain, and Polygon, as confirmed by data from Etherscan.
According to Cyvers Alerts, these unusual movements began after the entity whitelisted an external address for withdrawal purposes. It is currently unclear whether these transfers are related to the ongoing SafeMoon bankruptcy case. SafeMoon has not issued any public statements regarding this matter thus far. However, in response to the news, the value of SafeMoon’s SFM token has dropped by more than 8%, according to CoinMarketCap.
In mid-December 2023, SafeMoon initiated bankruptcy proceedings with the U.S. Bankruptcy Court in the District of Utah. This decision came shortly after the U.S. Securities and Exchange Commission (SEC) accused SafeMoon and its key executives, including founder Kyle Nagy, CEO John Karony, and CTO Thomas Smith, of violating securities laws.
According to the SEC, the trio engaged in a “massive fraudulent scheme,” allegedly manipulating SafeMoon’s market capitalization to $5.7 billion through tactics such as wash trading, deceptive marketing strategies, and providing misleading information about liquidity lock-up timelines. While Karony and Smith have been arrested, Nagy remains at large.
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