$2 500 000 USD

SEPTEMBER 2020

GLOBAL

EMERALD MINE

DESCRIPTION OF EVENTS

"Emerald EMD was a liquid mining project on EOS launched on 9th September. Due to the huge Hype on the new DeFi projects on EOS, many users jumped on the new opportunity and in a few hours they had already collected a lot of money."

 

"According to some users, the creator of the EMD contract, had managed to attract a considerable amount of funds, through a kind of Pump and Dump of the Emerald coins. Indeed, in order to boost the price of EMD, he had himself deposited about 40,000 EOS to make the emerald coin shoot to the high price of 500EOS-1000EOS. Seeing this opportunity, many users thought to lock their funds and earn 10x as much as their deposits."

 

"After only 13 hours after the launch, large amounts of EMD funds were transferred one after the other." "SlowMist warned users not to send additional funds to the smart contract for liquidity mining because some of the funds have already been transferred to exchange platforms."

 

"The PeckShield Security team pointed out that there were several problems in the EMD contract, among them the fact that the active permission of the contract was controlled by a single entity, and there was no multi-signature system implemented. For this reason both SlowMist and PeckShield were already sure of the scam that is happening."

 

"According to some reports, 780 thousand USDT, 490 thousand EOS and 56 thousand DFS were withdrawn from the “emeraldmine1” contract."

 

"On the 9th of September, China’s SlowMist Technology released a warning that an EOS DeFi mining project Emerald Mine (EMD) is “suspected to run.” According to the warning, the project has moved users’ locked tokens to an account labeled “sji111111111.” The transferred assets include 780,000 USDT, 490,000 EOS, and more. In total, the assets are worth nearly $2.5 million." "On Sep 8, the account sji111111111 received 787k USDT, 56k DFS, and 490k EOS from the emeraldmine1 DeFi account."

 

"According to the mainnet deployment record, the project has upgraded the contract after its release."

 

"Emerald Mine (EMD), a liquidity mining DeFi project on EOS, has moved $2.5M worth of user tokens that were supposedly locked in smart contract to an account labeled “sji111111111”. The EMD project’s website has since become inaccessible. There’s nothing new under the sun, just another exit scam."

 

"A little later EMD's website was no longer accessible, and users who by then realized they had been scammed started sending hundreds of messages to the sji1111111 account, asking them very fiercely to return the money." "When Altcoin Buzz tried to find more information about the EMD founders and team, [they] noticed that the EMD website is not accessible."

 

"After that, the funds had been sent to various exchange platforms." "Part of those funds has been stopped on [ChangeNow] thanks to [their] risk management system." "The alleged exit scammers tried to sell a large sum of their EOS on the ChangeNow platform, a total of 135,020 EOS worth almost $380,000." "The sum of 135020 EOS (~ $379049) was marked as suspicious by the ChangeNOW risk management system, retained, and placed in cold storage waiting for official requests from local law enforcement authorities in order to return the funds to their owners." "This may allow them the opportunity to return the almost $400,000 of user funds back to the original users."

 

"If you are a victim of the Emerald Mine (EMD) exit scam, please reach out to your local law enforcement agency. ChangeNow is expecting police requests that will allow them to return funds back to their rightful owners."

 

“Anyone who has suffered from the exit scam can turn to their local police, and if they contact us, our compliance team will check the legitimacy of the request and then a return procedure will be executed.”

 

"The scammed users immediately took action and reached the police to block the owner's exchanges accounts."

 

"According to PeckShield, these stolen USDT tokens are now moving from sji111111111 to DeFibox and other platforms. DeFiBox is now working with SlowMist and other security companies to track these tokens. Meanwhile, Newdex, the largest EOS-based decentralized exchange, has been contacted to add account sji111111111 to the transaction blacklist."

 

"Most of the assets have been refunded to investors due to the hard work of TokenPocket, Difis Network and Changenow."

A user created a smart contract on the EOS platform, which placed them in exclusive control of a large liquidity pool. They funded the contract with a sizable amount of EOS.

 

After others started also using their platform, they then used their access permissions to withdraw the funds. Many of the withdrawals were caught by trading platforms before they were traded, and most funds were returned to users.

 

HOW COULD THIS HAVE BEEN PREVENTED?

A smart contract which places the control of the assets in the hands of a single anonymous person should not be considered a safe place to store your funds.

 

Check Our Framework For Safe Secure Exchange Platforms

Crypto G - Fresh Cryptocurrency Blockchain News (Jun 5)
В экзит-скаме заподозрили DeFi-проект LV Finance - Stratum24 Украина (Jun 5)
DeFi Exit Scam Yfdexf.Finance Disappears With $20 Billion (Jun 13)
微博国际版 (Jun 13)
Is Eos Defi Catching Up With Ethereum (Jun 13)
Emerald Mine Exit Scam Statement (Jun 13)
@lukestokes Twitter (Jun 13)
ChangeNow Reports on Emerald Mine Exit Scam and Statements | Cryptimi (Jun 13)
ChangeNOW | Crypto Exchange | Fast BTC to ETH, XRP, BCH, XMR, NEO Swaps (Jun 13)
DeFi Exit Scam Alert - $2.5m Moved (Jun 13)
Cryptocurrency Crime and Anti-Money Laundering Report, February 2021 - CipherTrace (Jun 13)
EOS DeFi Project Moves Crypto Worth $2.5 Million in Apparent Exit Scam | Cryptoglobe (Jun 13)
Emerald Mine (EMD) exit scam ? : eos (Jun 13)
Popularity of EOS DeFi brings the first $2.5M scam | EOS Go News (Jun 13)
Security Firms Warn of Potential DeFi Exit Scam - CoinDesk (Jun 13)
@changenow_io Twitter (Jun 13)
Is Bitcoin Headed Back Below $10k? Uncertainty Grows as Traders Hesitate | Finance Magnates (Jun 13)
Security Firms Warn of Potential DeFi Exit Scam After $2.5m In Locked Cryptos Moved (Jun 13)
CipherTrace Cryptocurrency Crime and Anti-Money Laundering Report 2020 (Jun 20)
List of Defi scams (Jul 12)
Newsletter #11 (Jul 12)
12 Defi Con Artists Exposed – Are Rug Pulling Incidents Threatening the Future of Defi ?   – Bitcoin worldReport (Jul 24)
SlowMist Hacked - SlowMist Zone (Nov 8)
Worldwide crypto & NFT rug pulls and scams tracker - Comparitech (Dec 15)

Sources And Further Reading

 For questions or enquiries, email info@quadrigainitiative.com.

Get Social

  • email
  • reddit
  • telegram
  • Twitter

© 2021 Quadriga Initiative. Your use of this site/service accepts the Terms of Use and Privacy Policy. This site is not associated with Ernst & Young, Miller Thompson, or the Official Committee of Affected Users. Hosted in Canada by HosterBox.