Wine Swap, launched on Binance smart chain, pulled the plugs just after an hour of its launch.
The security team at Binance managed to recover 99.9% of the funds stolen but this is a lesson well learned.
Wine Swap launch
Binance smart chain, the popular competitor to the Ethereum network announced that Wine Swap was launched on it as an AMM platform on October 13th, 2020. But only an hour after the product was released on the noted chain, the Wine Swap team removed all the support and assistance, taking over the $345,000 of the customer funds under its control. The exchange, having mechanics to counter such an intended action, identified the teams by their on-chain BSC addresses which saw a total of 19 different tokens sent to 119 different addresses.
The statement it issued read:
“When the exit scam was executed, funds remaining in the contract (0xa1eaB5F255DD77fED0D8ea81748422ca7ab0eDc4) were transferred to the creator’s address (0x4BA023aA9196a354C008aD595F67e268420b7005)”
What did Binance do?
The team at Binance notably took note of all the transactions and detected that a small portion of it on two different digital exchanges. At this juncture, almost all the funds were converted into stablecoins, Binance Coin (BNB), Ethereum (ETH), and Chainlink (LINK). On October 14th, Binance’s security team was smart enough to identify the perpetrator and quickly contacted the scheme’s mastermind. Binance claims that the scammer apparently gave in and cooperated extremely well so that the upcoming impending consequences would not be harsh.
The security team at Binance has ever since been proactive and has been after the perpetrator to recover funds. After working together a total of 99.9% of the funds have been recovered on the stolen $345,000. The exchange has also added that the funds have been reconverted to the original tokens and the users who have been affected by this incident will receive their funds in the next few days.
The truthfulness and legitimacy of every project in the DeFi sector are hard to predict. We have already seen the booming scenario of DeFi and several projects that have added to the spice, but the massive growth can be blinding enough to prevent a fine distinction between the good and the bad. The way Binance handled the entire recovery process has been worthy of admiration, but it also opens up a new chapter, which is why every investor should take a cautious approach in picking projects and putting their money in.
The Binance smart chain team had been aggressively pursuing the recovery, but the question to be asked is whether every such scam will convert into a successful recovery? The team has also portrayed the roles of the security and finance teams as the two exchanges froze the funds from the scam.
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