$31 million siphoned off Binance Smart Chain-based DeFi project Meerkat

Another decentralized finance (DeFi) project has fallen victim to an attack, but this time, on the Binance Smart Chain (BSC).

Meerkat has just revealed that it lost $31 million worth of crypto-assets in a hack and on-chain data shows that the matter is not that that simple.

Is it a rug pull?

Meerkat, a yield farming pool running on BSC went live a day ago, communicated to its users via Telegram that its smart contract vault was compromised. 

The project lost 13 million BUSD and roughly 73,635 BNB, which amount to about $31 million. The funds were then transferred to a number of new blockchain addresses.

On-chain data suggests that the perpetrator siphoned off the funds by manipulating Meerkat’s smart contract. This means that the project’s private key was compromised or this was done by Meerkat.

However, there are notable red flags that suggest that this may be a rug pull. The project’s website has been taken down while the official Twitter account was deleted.

BSC project Meerkat Finance is suspected of being rug, taking away 13.96 million BUSD, and the other 73,635 BNB. MKAT claimed to be hacked and stole all resources. Currently the project website cannot be opened. This may be the largest fraud project on the binance smart chain. pic.twitter.com/KbdclfDBKA

— Wu Blockchain (@WuBlockchain) March 4, 2021

Per the tweet above, this could be the biggest fraud project on BSC, which is recently gaining traction as a viable DeFi platform.

BSC, an alternative to Ethereum

Binance Smart Chain has gained a lot of attention over the last month due to Ethereum’s congestion and the subsequent high gas fees.

Many DeFi projects and traders are also shifting to BSC as a result of scalability issues. The rising popularity of BSC and its use as an Ethereum alternative helped sky-rocket BNB’s value from around $50 in early February to a peak of $342 a few weeks ago.

A number of DeFi protocols based on BSC are soaring to new all-time highs and the trading volumes are going up as well.

Binance CEO Changpeng Zhao recently urged UniSwap to consider migrating to BSC.

BSC is being hyped as the next Ethereum killer but rug pulls could derail this. 

Binance’s action on Meerkat

Traders have pinned their hopes on Binance to take action and protect their interests amid the Meerkat “hack”. The exchange’s representatives said that it is aware of the abnormality of the Meerkat project and has sought the services of auditing three firms – Certik, PeckShield, and Slowmist – to look into it.