QUADRIGA INITIATIVE
CRYPTO WATCHDOG & FRAUD RECOVERY PLATFORM
A COMMUNITY-BASED, NOT-FOR-PROFIT
UNKNOWN
APRIL 2025
GLOBAL
QUANTMASTER
DESCRIPTION OF EVENTS
QuantMaster is a decentralized finance (DeFi) protocol specializing in asset investment strategies with the goal of achieving stable and secure high returns in the unpredictable cryptocurrency market. Developed by a team with substantial experience in both traditional finance and the crypto space, QuantMaster aims to provide a safe and reliable alternative to emotionally-driven trading often seen among individual investors. The protocol offers carefully crafted strategies such as neutral quantitative trading and on-chain arbitrage, which rely on data and deterministic opportunities rather than market sentiment.
What sets QuantMaster apart is its emphasis on long-term stability and security over speculative high-yield pursuits. Recognizing the steep learning curve and risk in crypto trading, the team prioritizes disciplined investment approaches and comprehensive risk management. Their core philosophy distinguishes investment—based on informed analysis and systematic strategy—from speculation, which they view as akin to gambling.
To build user trust, QuantMaster emphasizes transparency and safety. It partners with top-tier smart contract auditing firms such as Code4rena, CodeHawks, and Trail of Bits, and collaborates with reputable fund custodians like Ceffu and Cobo. The platform supports multiple DeFi protocols and blockchain networks, and currently reports over $2.1 million in total value locked (TVL), offering yields exceeding 20% annually. QuantMaster is positioned as a trustworthy and methodical solution for investors seeking sustainable returns in the crypto economy.
One of the employees trusted decided they would prefer to provide themselves with access to the funds in the protocol.
An employee submitted smart contract code that contained a hardcoded malicious wallet address (partially masked as 0xb58) under the variable name crvTokenAddress. This address was given owner-level permissions, allowing it to initiate withdrawal operations and drain funds from the contract. Although Git commit records showed the employee submitted the code from a unique device, the employee denied writing the malicious line and claimed it may have been AI-generated code that they failed to review. However, forensic analysis using the Cursor development environment and the Claude 3.7 AI model confirmed that the AI would not have completed the address as 0xb58, strongly suggesting manual insertion. The malicious wallet address also exhibited numerous on-chain activities, indicating a deliberate and well-planned attack rather than an AI error.
According to Cat Crypto's report, the amount lost was several hundred thousand USDT — described as "几十万U" in Chinese, which typically translates to between 200,000 and 900,000 USDT. The exact figure isn't specified but falls within that general range.
The initial reactions to the QuantMaster exploit and fund drain were marked by shock, frustration, and urgency within the project team and the broader crypto community. Developer Thomson publicly identified himself as the victim, expressing both exhaustion and relief after managing to file a police report with the help of SlowMist founder Yu Xian. The community responded with concern, especially as the case raised serious questions about accountability in AI-assisted coding workflows. Some were startled by the employee’s defense—claiming that the AI had written the malicious code and they had failed to review it—highlighting the growing complexity of human-AI collaboration in Web3 development. The inability to immediately trace the ownership of the malicious wallet also added to the tension, as the team scrambled to secure evidence and prevent further damage.
The employee denied responsibility, claiming the AI wrote the malicious code and they failed to review it. An AI audit using the Cursor development environment and the Claude 3.7 AI model confirmed that the AI would not have completed the address as 0xb58, strongly suggesting manual insertion.
The QuantMaster exploit remains unresolved. While the developer, Thomson, successfully reported the incident to the police with assistance from SlowMist founder Yu Xian, and the suspect has been largely identified through Git commit records and a unique submission device, the malicious wallet address also exhibited numerous on-chain activities, indicating a deliberate and well-planned attack.
The inability to immediately trace the ownership of the malicious wallet has added to the tension, as the team continues to investigate and secure evidence. The case raises broader questions about accountability in AI-assisted coding workflows and the complexities of human-AI collaboration in Web3 development.
QuantMaster, a DeFi protocol focused on secure, stable asset investment strategies, suffered a major internal exploit when an employee allegedly inserted a hardcoded malicious wallet address into its smart contract, enabling the unauthorized withdrawal of several hundred thousand USDT. Although the suspect denied responsibility and blamed AI-generated code, forensic analysis ruled out AI involvement, pointing instead to intentional human action. The incident resulted in a police report and raised serious concerns about trust, security, and accountability in AI-assisted Web3 development.
QuantMaster Homepage (May 27)
Introduction | QuantMaster (May 27)
Thomson Yang - "A criminal case has been filed. Blockchain rights defense is far more difficult than imagined." - Twitter/X (May 27)
QuantMaster Project Confirms It Suffered Losses Due to Malicious Code Implanted by Employee, Developer Reports and Identifies Suspect - Binance Square (May 27)
QuantMaster project confirmed that it was damaged by malicious code implanted by employees, and the developer reported the case to the police and identified the suspect - PA News Lab (May 27)
The project previously implanted with malicious code by an employee may be QuantMaster, and the developer claims to have ruled out the possibility of AI wrongdoing. - Binance Square (May 27)
Cat Crypto - "A friend of mine who runs a crypto startup was robbed of several hundred thousand USDT today. An employee is a prime suspect, but the reason the employee gave is truly thought-provoking — it might even represent a potential Web3 + AI scenario." - Twitter/X (May 27)
