Armor Finance OTC Scam - Revision history

Azoundria at 18:52, 2 May 2023

2023-05-02T18:52:08Z

← Older revision		Revision as of 12:52, 2 May 2023
Line 1:		Line 1:
	{{Imported Case Study\|source=https://www.quadrigainitiative.com/casestudy/armorfinanceotcscam.php}}		{{Imported Case Study 2\|source=https://www.quadrigainitiative.com/casestudy/armorfinanceotcscam.php}}
	{{Unattributed ~~Citations~~}}		{{Unattributed Sources}}

	[[File:Armorfinance.jpg\|thumb\|Armor Finance]]Armor Finance is an insurance protocol which according to CryptoBriefing, didn't honour a claim for $1.6m and kept funds for themselves.		[[File:Armorfinance.jpg\|thumb\|Armor Finance]]Armor Finance is an insurance protocol which according to CryptoBriefing, didn't honour a claim for $1.6m and kept funds for themselves.
Line 6:		Line 6:
	At one point, they were tricked by a thief into sending Armor tokens for free, when a member of their development team didn't check a transaction that was supposed to act as escrow.		At one point, they were tricked by a thief into sending Armor tokens for free, when a member of their development team didn't check a transaction that was supposed to act as escrow.

	This is a global/international case not involving a specific country.		This is a global/international case not involving a specific country.<ref name="slowmisthacked-678" /><ref name="armorfitwitter-958" /><ref name="coingecko-959" /><ref name="utoday-960" /><ref name="tahazafar12twitter-961" /><ref name="mininguniverse-962" /><ref name="cryptobriefing-963" /><ref name="defirate-964" />
	<ref name="slowmisthacked-678" /><ref name="armorfitwitter-958" /><ref name="coingecko-959" /><ref name="utoday-960" /><ref name="tahazafar12twitter-961" /><ref name="mininguniverse-962" /><ref name="cryptobriefing-963" /><ref name="defirate-964" />

	== About Armor Finance ==		== About Armor Finance ==
Line 67:		Line 66:
	!Description		!Description
	\|-		\|-
	\|February 28th, 2021 ~~12:00:00 AM~~		\|February 28th, 2021
	\|Main Event		\|Main Event
	\|Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.		\|Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.
Line 75:		Line 74:
	\|		\|
	\|}		\|}

			== Technical Details ==
			This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?

	== Total Amount Lost ==		== Total Amount Lost ==
Line 94:		Line 96:
	== Ongoing Developments ==		== Ongoing Developments ==
	What parts of this case are still remaining to be concluded?		What parts of this case are still remaining to be concluded?
			== General Prevention Policies ==
			It was very clear from this incident that the member of the Armor team did not have the training or care to check over the transaction. Even if fully trained, this is an illustration of the problem of relying on a single person to validate a transaction. Were others on the team required to validate the transaction, it is almost certain that the deception would have been caught.
			== Individual Prevention Policies ==
			{{Prevention:Individuals:Placeholder}}

			{{Prevention:Individuals:End}}

			== Platform Prevention Policies ==
			{{Prevention:Platforms:Placeholder}}

			{{Prevention:Platforms:End}}

			== Regulatory Prevention Policies ==
			{{Prevention:Regulators:Placeholder}}

	== Prevention ~~Policies ==~~		{{Prevention:Regulators:End}}
	It was very clear from this incident that the member of the Armor team did not have the training or care to check over the transaction. Even if fully trained, this is an illustration of the problem of relying on a single person to validate a transaction. Were others on the team required to validate the transaction, it is almost certain that the deception would have been caught.

	== References ==		== References ==
	<references><ref name="slowmisthacked-678">[https://hacked.slowmist.io/en/?c=ETH%20DApp SlowMist Hacked - SlowMist Zone] (May 17, 2021)</ref>		<references><ref name="slowmisthacked-678">[https://hacked.slowmist.io/en/?c=ETH%20DApp SlowMist Hacked - SlowMist Zone] (May 18, 2021)</ref>

	<ref name="armorfitwitter-958">[https://twitter.com/ArmorFi/status/1365863250827620352 @ArmorFi Twitter] (May 25, 2021)</ref>		<ref name="armorfitwitter-958">[https://twitter.com/ArmorFi/status/1365863250827620352 @ArmorFi Twitter] (May 26, 2021)</ref>

	<ref name="coingecko-959">[https://www.coingecko.com/en/coins/armor ARMOR price, chart, market cap and info \| CoinGecko] (May 25, 2021)</ref>		<ref name="coingecko-959">[https://www.coingecko.com/en/coins/armor ARMOR price, chart, market cap and info \| CoinGecko] (May 26, 2021)</ref>

	<ref name="utoday-960">[https://u.today/furucombo-combo-and-armorfi-armor-defis-attacked-today-15-million-lost-heres-what-happened FuruCombo (COMBO) and ArmorFi (ARMOR) DeFis Attacked Today, $15 Million Lost. Here's What Happened] (May 25, 2021)</ref>		<ref name="utoday-960">[https://u.today/furucombo-combo-and-armorfi-armor-defis-attacked-today-15-million-lost-heres-what-happened FuruCombo (COMBO) and ArmorFi (ARMOR) DeFis Attacked Today, $15 Million Lost. Here's What Happened] (May 26, 2021)</ref>

	<ref name="tahazafar12twitter-961">[https://twitter.com/taha_zafar12/status/1365946641681952772 @taha_zafar12 Twitter] (May 25, 2021)</ref>		<ref name="tahazafar12twitter-961">[https://twitter.com/taha_zafar12/status/1365946641681952772 @taha_zafar12 Twitter] (May 26, 2021)</ref>

	<ref name="mininguniverse-962">[https://mininguniverse.ru/en/furucombo-combo-i-armorfi-armor-defis-atakovany-segodnya-poteryano-15/ FuruCombo Combo I ArmorFi Armor DeFis] (May 25, 2021)</ref>		<ref name="mininguniverse-962">[https://mininguniverse.ru/en/furucombo-combo-i-armorfi-armor-defis-atakovany-segodnya-poteryano-15/ FuruCombo Combo I ArmorFi Armor DeFis] (May 26, 2021)</ref>

	<ref name="cryptobriefing-963">[https://cryptobriefing.com/armor-finance-denies-user-1-6-million-insurance-claim/ Armor Finance Denies User $1.6 Million Insurance Claim \| Crypto Briefing] (May 25, 2021)</ref>		<ref name="cryptobriefing-963">[https://cryptobriefing.com/armor-finance-denies-user-1-6-million-insurance-claim/ Armor Finance Denies User $1.6 Million Insurance Claim \| Crypto Briefing] (May 26, 2021)</ref>

	<ref name="defirate-964">[https://defirate.com/armor-institutional-partners/ Armor.Fi New Liquidity Incentives and Institutional Partner - DeFi Rate] (May 25, 2021)</ref></references>		<ref name="defirate-964">[https://defirate.com/armor-institutional-partners/ Armor.Fi New Liquidity Incentives and Institutional Partner - DeFi Rate] (May 26, 2021)</ref></references>

Azoundria at 19:57, 17 February 2023

2023-02-17T19:57:18Z

← Older revision		Revision as of 13:57, 17 February 2023
Line 1:		Line 1:
	{{Imported Case Study\|source=https://www.quadrigainitiative.com/casestudy/armorfinanceotcscam.php}}		{{Imported Case Study\|source=https://www.quadrigainitiative.com/casestudy/armorfinanceotcscam.php}}
			{{Unattributed Citations}}

	[[File:Armorfinance.jpg\|thumb\|Armor Finance]]Armor Finance is an insurance protocol which according to CryptoBriefing, didn't honour a claim for $1.6m and kept funds for themselves.		[[File:Armorfinance.jpg\|thumb\|Armor Finance]]Armor Finance is an insurance protocol which according to CryptoBriefing, didn't honour a claim for $1.6m and kept funds for themselves.
Line 6:		Line 7:

	This is a global/international case not involving a specific country.		This is a global/international case not involving a specific country.
			<ref name="slowmisthacked-678" /><ref name="armorfitwitter-958" /><ref name="coingecko-959" /><ref name="utoday-960" /><ref name="tahazafar12twitter-961" /><ref name="mininguniverse-962" /><ref name="cryptobriefing-963" /><ref name="defirate-964" />

	== About Armor Finance ==		== About Armor Finance ==
Line 45:		Line 47:

	Don't Include:		Don't Include:

	* Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.		* Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
	* Anything that wasn't reasonably knowable at the time of the event.		* Anything that wasn't reasonably knowable at the time of the event.
Line 67:		Line 68:
	\|-		\|-
	\|February 28th, 2021 12:00:00 AM		\|February 28th, 2021 12:00:00 AM
	\|~~First~~ Event		\|Main Event
	\|~~This is an expanded~~ description of what happened and the impact. If multiple lines are necessary, add them here.		\|Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.
	\|-
	\|
	\|
	\|
	\|-		\|-
	\|		\|
Line 80:		Line 77:

	== Total Amount Lost ==		== Total Amount Lost ==
	The total amount lost ~~is unknown~~.		The total amount lost has been estimated at $850,000 USD.

	How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?		How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?
Line 91:		Line 88:

	== Total Amount Recovered ==		== Total Amount Recovered ==
	~~It is unknown how much was~~ recovered.		There do not appear to have been any funds recovered in this case.

	What funds were recovered? What funds were reimbursed for those affected users?		What funds were recovered? What funds were reimbursed for those affected users?
Line 102:		Line 99:

	== References ==		== References ==
	[https://hacked.slowmist.io/en/?c=ETH%20DApp SlowMist Hacked - SlowMist Zone] (May 17)		<references><ref name="slowmisthacked-678">[https://hacked.slowmist.io/en/?c=ETH%20DApp SlowMist Hacked - SlowMist Zone] (May 17, 2021)</ref>

	[https://twitter.com/ArmorFi/status/1365863250827620352 @ArmorFi Twitter] (May 25)		<ref name="armorfitwitter-958">[https://twitter.com/ArmorFi/status/1365863250827620352 @ArmorFi Twitter] (May 25, 2021)</ref>

	[https://www.coingecko.com/en/coins/armor ARMOR price, chart, market cap and info \| CoinGecko] (May 25)		<ref name="coingecko-959">[https://www.coingecko.com/en/coins/armor ARMOR price, chart, market cap and info \| CoinGecko] (May 25, 2021)</ref>

	[https://u.today/furucombo-combo-and-armorfi-armor-defis-attacked-today-15-million-lost-heres-what-happened FuruCombo (COMBO) and ArmorFi (ARMOR) DeFis Attacked Today, $15 Million Lost. Here's What Happened] (May 25)		<ref name="utoday-960">[https://u.today/furucombo-combo-and-armorfi-armor-defis-attacked-today-15-million-lost-heres-what-happened FuruCombo (COMBO) and ArmorFi (ARMOR) DeFis Attacked Today, $15 Million Lost. Here's What Happened] (May 25, 2021)</ref>

	[https://twitter.com/taha_zafar12/status/1365946641681952772 @taha_zafar12 Twitter] (May 25)		<ref name="tahazafar12twitter-961">[https://twitter.com/taha_zafar12/status/1365946641681952772 @taha_zafar12 Twitter] (May 25, 2021)</ref>

	[https://mininguniverse.ru/en/furucombo-combo-i-armorfi-armor-defis-atakovany-segodnya-poteryano-15/ FuruCombo Combo I ArmorFi Armor DeFis] (May 25)		<ref name="mininguniverse-962">[https://mininguniverse.ru/en/furucombo-combo-i-armorfi-armor-defis-atakovany-segodnya-poteryano-15/ FuruCombo Combo I ArmorFi Armor DeFis] (May 25, 2021)</ref>

	[https://cryptobriefing.com/armor-finance-denies-user-1-6-million-insurance-claim/ Armor Finance Denies User $1.6 Million Insurance Claim \| Crypto Briefing] (May 25)		<ref name="cryptobriefing-963">[https://cryptobriefing.com/armor-finance-denies-user-1-6-million-insurance-claim/ Armor Finance Denies User $1.6 Million Insurance Claim \| Crypto Briefing] (May 25, 2021)</ref>

	[https://defirate.com/armor-institutional-partners/ Armor.Fi New Liquidity Incentives and Institutional Partner - DeFi Rate] (May 25)		<ref name="defirate-964">[https://defirate.com/armor-institutional-partners/ Armor.Fi New Liquidity Incentives and Institutional Partner - DeFi Rate] (May 25, 2021)</ref></references>

Azoundria: Created page with "{{Imported Case Study|source=https://www.quadrigainitiative.com/casestudy/armorfinanceotcscam.php}} Armor FinanceArmor Finance is an insurance protocol which according to CryptoBriefing, didn't honour a claim for $1.6m and kept funds for themselves. At one point, they were tricked by a thief into sending Armor tokens for free, when a member of their development team didn't check a transaction that was supposed to act as escrow. This is..."

2023-01-26T05:24:12Z

Created page with "{{Imported Case Study|source=https://www.quadrigainitiative.com/casestudy/armorfinanceotcscam.php}} thumb|Armor FinanceArmor Finance is an insurance protocol which according to CryptoBriefing, didn't honour a claim for $1.6m and kept funds for themselves. At one point, they were tricked by a thief into sending Armor tokens for free, when a member of their development team didn't check a transaction that was supposed to act as escrow. This is..."

New page

{{Imported Case Study|source=https://www.quadrigainitiative.com/casestudy/armorfinanceotcscam.php}}

[[File:Armorfinance.jpg|thumb|Armor Finance]]Armor Finance is an insurance protocol which according to CryptoBriefing, didn't honour a claim for $1.6m and kept funds for themselves.

At one point, they were tricked by a thief into sending Armor tokens for free, when a member of their development team didn't check a transaction that was supposed to act as escrow.

This is a global/international case not involving a specific country.

== About Armor Finance ==
"Armor is a decentralized brokerage for cover underwritten by Nexus Mutual's blockchain-based insurance alternative." "Armor is the first insurance aggregator for DeFi. Leveraging the underwriting capability of Nexus Mutual, it offers pay-as-you-go insurance products and the ability to buy insurance covers without KYC."

"It is the second iteration of the yInsure product from Yearn Finance. The first iteration of yInsure failed after the yInsure’s founders had a fallout. Yearn Finance chose to partner with COVER instead after the event and leave the yInsure product to Armor. During launch, there are four main products, arNXM, arNFT, arCORE and arSHIELD."

"Beyond earning tokens from providing liquidity and staking their purchased cover, users can also purchase tokens when they are available through Armor.Fi’s institutional partner. In anticipation of the investors who might want to own Armor tokens in larger quantities, the team has partnered with Bering Waters OTC to service institutional buyers in the secondary market.'

"The Armor team claimed that some team members were scammed by OTC and were defrauded of 1.2 million ARMOR tokens."

"A scammer took 1.2m ARMOR tokens from a team member which they have already finished dumping for approx. 600 ETH ($850k USD). Nothing was hacked, the project remains safe and @ArmorFi can recover from here."

"A sophisticated social engineering scam took place across telegram and discord where a scammer posed as a strategic investor, wanting to buy OTC." "While Armor has an official OTC broker, with whom they were introduced, the broker was away at the time and the scammer said they wanted to close the transaction within the hour while their trader was online." "They then suggested another team member could be escrow and it seemed reasonable that the broker could catch up with it later. One team member, remaining unnamed on this thread, was available to be escrow." "This non-dev team member acting as escrow was up late around 1am his time, and was scammed out of the tokens having been tricked with fake accounts following receipt of escrowed tokens, where he did not follow basic OpSec to verify transactions."

"An attacker impersonated an influential OTC investor at Discord. It reached two members of the ArmorFi team in order to close transactions in a rush. One of the "non-dev" team members was chosen as escrow. Then, attackers sent fake proof of finalized transactions revealing his negligence."

"The scammers have already dumped all tokens for a profit of 600 ETH (approximately US$850,000). The Armor team disclosed that the scammers pretended to be strategic investors on social media, falsely claiming to purchase tokens from the team through OTC, defrauded 1.2 million ARMOR tokens in OTC transactions, and then sold them. According to the Armor team, "No hacking, the project is still safe.""

"Analyst Taha Zafar noticed that ArmorFi did not prepare an ICO or a private sale, so the whole story about large-scale OTC deals looks "funny" to him."

"Community support to help investigate and prevent these stolen funds from being usable for the hacker will be appreciated."

"The team has already implemented better security practices against social engineering attacks in the future, so an event like this will not recur." "Long term view this is a tiny bump on the road for Armor and a benefit to the growth and security of DeFi by sharing our story so others can be safer going forward."

This is a global/international case not involving a specific country.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

* Known history of when and how the service was started.
* What problems does the company or service claim to solve?
* What marketing materials were used by the firm or business?
* Audits performed, and excerpts that may have been included.
* Business registration documents shown (fake or legitimate).
* How were people recruited to participate?
* Public warnings and announcements prior to the event.

Don't Include:

* Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
* Anything that wasn't reasonably knowable at the time of the event.
There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

== The Reality ==
This sections is included if a case involved deception or information that was unknown at the time. Examples include:

* When the service was actually started (if different than the "official story").
* Who actually ran a service and their own personal history.
* How the service was structured behind the scenes. (For example, there was no "trading bot".)
* Details of what audits reported and how vulnerabilities were missed during auditing.

== What Happened ==
The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.
{| class="wikitable"
|+Key Event Timeline - Armor Finance OTC Scam
!Date
!Event
!Description
|-
|February 28th, 2021 12:00:00 AM
|First Event
|This is an expanded description of what happened and the impact. If multiple lines are necessary, add them here.
|-
|
|
|
|-
|
|
|
|}

== Total Amount Lost ==
The total amount lost is unknown.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

== Immediate Reactions ==
How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

== Ultimate Outcome ==
What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

== Total Amount Recovered ==
It is unknown how much was recovered.

What funds were recovered? What funds were reimbursed for those affected users?

== Ongoing Developments ==
What parts of this case are still remaining to be concluded?

== Prevention Policies ==
It was very clear from this incident that the member of the Armor team did not have the training or care to check over the transaction. Even if fully trained, this is an illustration of the problem of relying on a single person to validate a transaction. Were others on the team required to validate the transaction, it is almost certain that the deception would have been caught.

== References ==
[https://hacked.slowmist.io/en/?c=ETH%20DApp SlowMist Hacked - SlowMist Zone] (May 17)

[https://twitter.com/ArmorFi/status/1365863250827620352 @ArmorFi Twitter] (May 25)

[https://www.coingecko.com/en/coins/armor ARMOR price, chart, market cap and info | CoinGecko] (May 25)

[https://u.today/furucombo-combo-and-armorfi-armor-defis-attacked-today-15-million-lost-heres-what-happened FuruCombo (COMBO) and ArmorFi (ARMOR) DeFis Attacked Today, $15 Million Lost. Here's What Happened] (May 25)

[https://twitter.com/taha_zafar12/status/1365946641681952772 @taha_zafar12 Twitter] (May 25)

[https://mininguniverse.ru/en/furucombo-combo-i-armorfi-armor-defis-atakovany-segodnya-poteryano-15/ FuruCombo Combo I ArmorFi Armor DeFis] (May 25)

[https://cryptobriefing.com/armor-finance-denies-user-1-6-million-insurance-claim/ Armor Finance Denies User $1.6 Million Insurance Claim | Crypto Briefing] (May 25)

[https://defirate.com/armor-institutional-partners/ Armor.Fi New Liquidity Incentives and Institutional Partner - DeFi Rate] (May 25)