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2025-07-31T22:53:23Z

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{{Imported Case Study With About|source=https://www.quadrigainitiative.com/casestudy/krcsmartcontractdeflationarymechanismburnexploit.php}}
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[[File:Binancesecurity.jpg|thumb|Binance Security Image]]An attacker exploited a vulnerability in the KRC smart contract on Binance Smart Chain by bypassing `transfer()` restrictions to burn tokens from the liquidity pair during sell swaps, ultimately profiting $37.1k in USDT through a deflationary mechanism, with no response or recovery efforts confirmed as of now.<ref name="tenarmortweet-20825" /><ref name="suspicioustransaction1-20826" /><ref name="suspicioustransaction2-20827" /><ref name="krcexploiter-20828" /><ref name="krcexploitcontract-20829" /><ref name="krcexploitcontractcreation-20830" /><ref name="krctoken-20831" /><ref name="krctokencreation-20832" />

== About KRC ==
The KRC smart contract on the Binance Smart Chain was launched on May 22nd.

== 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 ==
An attacker exploited a vulnerability in the KRC smart contract to burn tokens during sell swaps and gain $37.1k in USDT.
{| class="wikitable"
|+Key Event Timeline - KRC Smart Contract Deflationary Mechanism Burn Exploit
!Date
!Event
!Description
|-
|May 22nd, 2025 7:56:24 AM MDT
|KRC Token Smart Contract Launched
|The KRC token smart contract is launched on the Binance Smart Chain.
|-
|May 23rd, 2025 4:13:45 PM MDT
|Malicious Smart Contract Launched
|The attacker launches a malicious smart contract in preparation for the attack against the KRC token.
|-
|May 23rd, 2025 4:18:03 PM MDT
|First Suspicious Attack Transaction
|First suspicious attack transaction against the KRC smart contract is exploited on Binance Smart Chain.
|-
|May 23rd, 2025 4:19:15 PM MDT
|Second Suspicious Attack Transaction
|Second suspicious attack transaction against the KRC smart contract is exploited on Binance Smart Chain.
|-
|May 23rd, 2025 8:27:00 PM MDT
|TenArmor Posts Announcement
|TenArmor posts an announcement that they have detected the suspicious transaction on the KRC token.
|}

== Technical Details ==
TenArmor reports that the attack reportedly occurred because the attacker was able to bypass the restrictions in the `transfer()` function and burned KRC tokens from the liquidity pair during each sell swap. As a result, they ultimately received more USDT due to the deflationary burning mechanism.

== Total Amount Lost ==
The loss total was reported by TenArmor as $37.1k.

The total amount lost has been estimated at $37,000 USD.

== Immediate Reactions ==
It's unclear whether or not the project has ever responded to the attack.

== Ultimate Outcome ==
The incident was reported on by TenArmor.

== Total Amount Recovered ==
There is no indication that any funds have yet been recovered.

There do not appear to have been any funds recovered in this case.

== Ongoing Developments ==
It's unclear if there is any investigation undergoing or potential recovery which may be possible.
== 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="tenarmortweet-20825">[https://twitter.com/TenArmorAlert/status/1926102792717980105 TenArmor - "Our system has detected a suspicious attack involving #KRC token on #BSC, resulting in an approximately loss of $37.1 K. It appears that the attacker bypassed the restrictions in the transfer() function and burned KRC tokens from the pair in every sell swap, finally got more USDT due to the deflationary burning mechanism." - Twitter/X] (Accessed Jul 31, 2025)</ref>

<ref name="suspicioustransaction1-20826">[https://bscscan.com/tx/0xe956390af12b6d8f50e3c7edea6d00e91f54a557605fe040ff9a1bfe5ae90ae2 First Suspicious Transaction Against KRC - BSCScan] (Accessed Jul 31, 2025)</ref>

<ref name="suspicioustransaction2-20827">[https://bscscan.com/tx/0x88e1cf17afa0bc81582b42db82ee8e1aa7f58d5dd67a6ed3ad0991c51bae4a81 Second Suspicious Transaction Against KRC - BSCScan] (Accessed Jul 31, 2025)</ref>

<ref name="krcexploiter-20828">[https://bscscan.com/address/0x9943f26831f9b468a7fe5ac531c352baab8af655 KRC Exploiter Address - BSCScan] (Accessed Jul 31, 2025)</ref>

<ref name="krcexploitcontract-20829">[https://bscscan.com/address/0x0edcff449dc8b13edadfbead841dc8fe522898c9 Malicious Contract By KRC Exploiter - BSCScan] (Accessed Jul 31, 2025)</ref>

<ref name="krcexploitcontractcreation-20830">[https://bscscan.com/tx/0xf554946c7410348a1084589bf6f3c62cb46f113fcfc76d6bc380ef3505cfcb2a Malicious Contract Created By KRC Exploiter - BSCScan] (Accessed Jul 31, 2025)</ref>

<ref name="krctoken-20831">[https://bscscan.com/address/0xd81f08187e541e94cb5d96efa9a94656ab4080c2 KRC Token Address - BSCScan] (Accessed Jul 31, 2025)</ref>

<ref name="krctokencreation-20832">[https://bscscan.com/tx/0xc2a82e7d6fd0bd59587f874b640e70cae5c2c7da9ce7d56e58ef71719ce721fb KRC Token Creation Transaction - BSCScan] (Accessed Jul 31, 2025)</ref></references>

KRC Smart Contract Deflationary Mechanism Burn Exploit - Revision history