Azoundria: Created page with "{{Imported Case Study With About|source=https://www.quadrigainitiative.com/casestudy/ipctokentransfertimeswapcontractvulnerability.php}} {{Unattributed Sources}} BNB Smart Chain ImageOn January 7th, 2025, the IPC AI token experienced an exploit, resulting in a loss of approximately $590K. The attacker leveraged the swap() function to avoid detection as a typical buy transaction, circumventing protective measures such as flashloan prote..."

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Created page with "{{Imported Case Study With About|source=https://www.quadrigainitiative.com/casestudy/ipctokentransfertimeswapcontractvulnerability.php}} {{Unattributed Sources}} thumb|BNB Smart Chain ImageOn January 7th, 2025, the IPC AI token experienced an exploit, resulting in a loss of approximately $590K. The attacker leveraged the swap() function to avoid detection as a typical buy transaction, circumventing protective measures such as flashloan prote..."

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{{Imported Case Study With About|source=https://www.quadrigainitiative.com/casestudy/ipctokentransfertimeswapcontractvulnerability.php}}
{{Unattributed Sources}}

[[File:Binancesecurity.jpg|thumb|BNB Smart Chain Image]]On January 7th, 2025, the IPC AI token experienced an exploit, resulting in a loss of approximately $590K. The attacker leveraged the swap() function to avoid detection as a typical buy transaction, circumventing protective measures such as flashloan protection and the token’s deflationary burning mechanism. By using a low-level swap approach, the attacker repeatedly swapped IPC tokens in and out of the victim's liquidity pool (LP) without triggering buy logic or proper balance updates. The exploit took advantage of flaws in the _isAddLP() and _transfer() functions, with the attacker successfully draining the victim's pool while evading protective measures. The exact nature of the exploit, whether a hack or rugpull, remains unclear.<ref name="bscscan-18021" /><ref name="pennysplayertwitter-18022" /><ref name="tikkalaresearchtwitter-18023" /><ref name="heimdqltwitter-18024" /><ref name="bscscan-18025" /><ref name="certikalerttwitter-18026" /><ref name="contractcreation-18027" /><ref name="blocksecapp-18028" />

== About IPC AI Token ==
IPC AI token is a smart contract launched on December 31st, 2024.

== 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 IPC AI smart contract was exploited.
{| class="wikitable"
|+Key Event Timeline - IPC Token TransferTime Swap Contract Vulnerability
!Date
!Event
!Description
|-
|December 30th, 2024 10:17:04 PM MST
|Blockchain Smart Contract Launched
|The IPC AI smart contract is launched on the Binance Smart Chain.
|-
|January 7th, 2025 8:52:22 AM MST
|Blockchain Transaction Hacking
|The blockchain transaction attributed to the theft.
|-
|January 7th, 2025 10:45:00 AM MST
|Tikkala Security Posting
|Tikkala Security shares a Tornado funded address which reportedly gained about $560k from a token "AI IPC" swap.
|-
|January 7th, 2025 8:47:00 PM MST
|CertiK Posts About Exploit
|CertiK shares a post with more details about the exploit.
|-
|January 8th, 2025 2:18:00 AM MST
|pennysplayer Tweet Posted
|"IPC exploited for $500k, hacker used swap() function to avoid beging detected as buy behavior. Thus transferTime[sender] of attack contract stays 0. Additionly he got to buy with fee=0. And when selling, nearly 50% of last sell amout got burned from pair."
|}

== Technical Details ==
"IPC exploited for $500k, hacker used swap() function to avoid beging detected as buy behavior. Thus transferTime[sender] of attack contract stays 0. Additionly he got to buy with fee=0. And when selling, nearly 50% of last sell amout got burned from pair."

"So if _isAddLP(pair) returns false: the recipient == pair: is triaged as sell in the LP, can force the transaction into the sell pathway"

"The attacker circumvented the flashloan protection mechanism and exploited the deflationary mechanism that burns tokens on the pair to drain the victim pair of ~$590K."

"The attacker repeatedly swapped IPC tokens in and out of the victim pair but did not trigger the protection logic against such behavior.

Instead of regular swapping through a router, the attacker used the low-level 'swap()' of the pair to swap out both tokens that, during IPC transfer, the reserve has not been updated.

The _isRemoveLP() compares the USDT reserve and balance on the pair and returns True, and thus _transfer() logic does not deem the IPC transfer as buy, and transferTime[recipient] is not properly updated."

"The root cause is the _destroy() function in the _transfer() function which will update the token balance of the swap thus impact the K number.
We are not sure if this is a hack or rugpull."

== Total Amount Lost ==
Losses were publicly reported as $590k widely, though one source reported as $560k. Actual blockchain data appears to show a value of $592k.

The total amount lost has been estimated at $592,000 USD.

== 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 ==
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?

== Ongoing Developments ==
What parts of this case are still remaining to be concluded?
== 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:Regulators:End}}

== References ==
<references><ref name="bscscan-18021">[https://bscscan.com/tx/0x5ef1edb9749af6cec511741225e6d47103e0b647d1e41e08649caaff66942a91 BNB Smart Chain Transaction Hash (Txhash) Details | BscScan] (Accessed Feb 12, 2025)</ref>

<ref name="pennysplayertwitter-18022">[https://twitter.com/pennysplayer/status/1876921491264016469 @pennysplayer Twitter] (Accessed Feb 12, 2025)</ref>

<ref name="tikkalaresearchtwitter-18023">[https://twitter.com/TikkalaResearch/status/1876686664371999007 @TikkalaResearch Twitter] (Accessed Feb 12, 2025)</ref>

<ref name="heimdqltwitter-18024">[https://twitter.com/heimdql/status/1876938103853551662 @heimdql Twitter] (Accessed Feb 12, 2025)</ref>

<ref name="bscscan-18025">[https://bscscan.com/token/0xeab0d46682ac707a06aefb0ac72a91a3fd6fe5d1 AI IPC (IPC) Token Tracker | BscScan] (Accessed Feb 12, 2025)</ref>

<ref name="certikalerttwitter-18026">[https://twitter.com/CertiKAlert/status/1876838123281223997 @CertiKAlert Twitter] (Accessed Feb 12, 2025)</ref>

<ref name="contractcreation-18027">[https://bscscan.com/tx/0x5894b4e70f6323951e8b81c63f5440e4855777e267f1b0bc7f9e1b7353d6a129 Smart Contract Creation Transaction] (Accessed Feb 12, 2025)</ref>

<ref name="blocksecapp-18028">[https://app.blocksec.com/explorer/tx/bsc/0x5ef1edb9749af6cec511741225e6d47103e0b647d1e41e08649caaff66942a91?line=9 https://app.blocksec.com/explorer/tx/bsc/0x5ef1edb9749af6cec511741225e6d47103e0b647d1e41e08649caaff66942a91?line=9] (Accessed Feb 12, 2025)</ref></references>

IPC Token TransferTime Swap Contract Vulnerability - Revision history