Kokomo Finance Lending Protocol Exit Scam - Revision history

Azoundria at 22:35, 15 May 2024

2024-05-15T22:35:00Z

← Older revision		Revision as of 16:35, 15 May 2024
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	{{Imported Case Study\|source=https://www.quadrigainitiative.com/casestudy/kokomofinancelendingprotocolexitscam.php}}[[File:Kokomofinance.jpg\|thumb\|Kokomo Finance Promotion]]Kokomo Finance was a newly launched open-source and non-custodial lending protocol built on Optimism and Arbitrum. It allowed users to lend and borrow digital assets, and its token KOKO had a 14-day genesis mining program. The protocol's audit, conducted by 0xGuard, only covered the token contract, not the entire protocol. Within a week of its launch, the protocol was exploited, resulting in the loss of around $4M, and the project's website, Twitter, GitHub, and Medium accounts were deleted. The attacker targeted the wrapped Bitcoin deposits, and even though $2M of tokens still remain in the project's pools on Optimism, the contracts are paused, and users can't withdraw funds. Kokomo Finance is unlikely to recover.		{{Imported Case Study\|source=https://www.quadrigainitiative.com/casestudy/kokomofinancelendingprotocolexitscam.php}}[[File:Kokomofinance.jpg\|thumb\|Kokomo Finance Promotion]]Kokomo Finance was a newly launched open-source and non-custodial lending protocol built on Optimism and Arbitrum. It allowed users to lend and borrow digital assets, and its token KOKO had a 14-day genesis mining program. The protocol's audit, conducted by 0xGuard, only covered the token contract, not the entire protocol. Within a week of its launch, the protocol was exploited, resulting in the loss of around $4M, and the project's website, Twitter, GitHub, and Medium accounts were deleted. The attacker targeted the wrapped Bitcoin deposits, and even though $2M of tokens still remain in the project's pools on Optimism, the contracts are paused, and users can't withdraw funds. Kokomo Finance is unlikely to recover.

			<ref name="comparitech-10032" />

	== About Kokomo Finance ==		== About Kokomo Finance ==
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	<ref name="kokomofinancetwitterarchive-10804">[https://web.archive.org/web/20230327052512/https://twitter.com/KokomoFinance @KokomoFinance Twitter] (May 3, 2023)</ref>		<ref name="kokomofinancetwitterarchive-10804">[https://web.archive.org/web/20230327052512/https://twitter.com/KokomoFinance @KokomoFinance Twitter] (May 3, 2023)</ref>
	<ref name="kokomofinancearchive-10805">[https://web.archive.org/web/20230314182504/http://kokomo.finance/ Registrant WHOIS contact information verification \| Namecheap.com Archive March 14th, 2023 12:25:04 PM MDT] (May 3, 2023)</ref>		<ref name="kokomofinancearchive-10805">[https://web.archive.org/web/20230314182504/http://kokomo.finance/ Registrant WHOIS contact information verification \| Namecheap.com Archive March 14th, 2023 12:25:04 PM MDT] (May 3, 2023)</ref>
			<ref name="comparitech-10032">[https://www.comparitech.com/crypto/cryptocurrency-scams/ Worldwide crypto & NFT rug pulls and scams tracker - Comparitech] (Dec 15, 2022)</ref>
	</references>		</references>

Azoundria: Another 30 minutes complete. All sources merged in.

2023-05-17T20:51:00Z

Another 30 minutes complete. All sources merged in.

Show changes

Azoundria: Adding in CoinTelegraph article and summary.

2023-05-03T20:51:45Z

Adding in CoinTelegraph article and summary.

← Older revision		Revision as of 14:51, 3 May 2023
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	\|Exit Scam Transaction		\|Exit Scam Transaction
	\|The blockchain transaction to remove liquidity from the smart contract<ref name="optimistic-10781" />.		\|The blockchain transaction to remove liquidity from the smart contract<ref name="optimistic-10781" />.
			\|-
			\|March 26th, 2023 11:40:00 PM MDT
			\|CoinTelegraph Article
			\|CoinTelegraph posts an article on the situation<ref name="cointelegraphtwitter-10800" />. Optimism-based lending protocol Kokomo Finance is suspected of carrying out a $4 million "exit scam" after its social media and website went offline, while the price of its KOKO token fell by over 95% in a matter of minutes. Security firm CertiK alerted its followers to the alleged scam in a tweet, noting that the KOKO token plummeted in value. CertiK said that the deployer of KOKO attacked the smart contract code of a wrapped Bitcoin token, cBTC, by resetting the reward speed and pausing the borrow function, before approving the new cBTC smart contract to spend over 7000 Sonne Wrapped Bitcoin (So-WBTC). The attacker then swapped the So-WBTC to another address, producing a $4 million profit. Kokomo Finance's smart contract audit passed most aspects, but had typographical errors and the owner of the KOKO token had the ability to mint 45% of the maximum supply to an arbitrary address<ref>[https://cointelegraph.com/news/4m-exit-scam-suspected-as-kokomo-finance-flies-off-radar-token-plunges $4M ‘exit scam’ suspected as Kokomo Finance flies off radar, token plunges - CoinTelegraph] (May 3, 2023)</ref>.
	\|-		\|-
	\|March 27th, 2023 2:12:00 PM MDT		\|March 27th, 2023 2:12:00 PM MDT

Azoundria: Initial 30 minutes.

2023-05-03T20:46:46Z

Initial 30 minutes.

Show changes

Azoundria: Created page with "{{Imported Case Study|source=https://www.quadrigainitiative.com/casestudy/kokomofinancelendingprotocolexitscam.php}} {{Unattributed Sources}} Kokomo Finance PromotionKokomo Finance was a newly launched open-source and non-custodial lending protocol built on Optimism and Arbitrum. It allowed users to lend and borrow digital assets, and its token KOKO had a 14-day genesis mining program. The protocol's audit, conducted by 0xGuard, only cov..."

2023-05-03T20:41:27Z

Created page with "{{Imported Case Study|source=https://www.quadrigainitiative.com/casestudy/kokomofinancelendingprotocolexitscam.php}} {{Unattributed Sources}} thumb|Kokomo Finance PromotionKokomo Finance was a newly launched open-source and non-custodial lending protocol built on Optimism and Arbitrum. It allowed users to lend and borrow digital assets, and its token KOKO had a 14-day genesis mining program. The protocol's audit, conducted by 0xGuard, only cov..."

New page

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

[[File:Kokomofinance.jpg|thumb|Kokomo Finance Promotion]]Kokomo Finance was a newly launched open-source and non-custodial lending protocol built on Optimism and Arbitrum. It allowed users to lend and borrow digital assets, and its token KOKO had a 14-day genesis mining program. The protocol's audit, conducted by 0xGuard, only covered the token contract, not the entire protocol. Within a week of its launch, the protocol was exploited, resulting in the loss of around $4M, and the project's website, Twitter, GitHub, and Medium accounts were deleted. The attacker targeted the wrapped Bitcoin deposits, and even though $2M of tokens still remain in the project's pools on Optimism, the contracts are paused, and users can't withdraw funds. Kokomo Finance is unlikely to recover.

This is a global/international case not involving a specific country.<ref name="rektnews-10776" /><ref name="coinmonksmedium-10777" /><ref name="youtube-10778" /><ref name="defillama-10779" /><ref name="optimismspacetwitterarchive-10780" /><ref name="optimistic-10781" /><ref name="defillamatwitter-10782" /><ref name="unointerntwitter-10783" /><ref name="c4dotggtwitter-10784" /><ref name="moemoeatwitter-10785" /><ref name="cryptoleeytwitter-10786" /><ref name="solaceyfeelstwitter-10787" /><ref name="ohhellohanatwitter-10788" /><ref name="sidenzgiwtwitter-10789" /><ref name="optimismeconomytwitter-10790" /><ref name="ro2noazerotwitter-10791" /><ref name="happykiyowokaytwitter-10792" /><ref name="pamungkhaztwitter-10793" /><ref name="0xguardtwitter-10794" /><ref name="0xguardtwitter-10795" /><ref name="cryptonotifybottwitter-10796" /><ref name="semqngattwitter-10797" /><ref name="leehc0xtwitter-10798" /><ref name="pirotreborntwitter-10799" /><ref name="cointelegraphtwitter-10800" /><ref name="cointelegraph-10801" /><ref name="kokomofinancearchive-10802" /><ref name="kokomofinancegithubarchive-10803" /><ref name="kokomofinancetwitterarchive-10804" /><ref name="kokomofinancearchive-10805" />

== About Kokomo Finance ==
"Kokomo Finance [was] an open source and non-custodial lending protocol on Optimism and Arbitrum."

"Kokomo Finance, an open source and non-custodial lending protocol. Enter http://kokomo.finance to lend, borrow and earn $KOKO here. A 14-days genesis mining starts now with a decent APR!"

"Hola Degen! After a long research, found a permission-less lending protocol to help the user to lend and borrow digital assets. The name of protocol is - @KokomoFinance which is built on @optimismFND Now lets jump to some depth of this protocol"

"The project’s audit, conducted by 0xGuard, covered just the token contract, rather than the protocol at large."

"1/ The deployer of KOKO Token, address 0x41BE, deployed attack contract cBTC. Then set the reward speed, paused the borrow and set the implementation contract into a malicious one.

2/ Address 0x5a2d… approved the cBTC contract to spend the 7010 sonne WBTC.

3/ Since the implementation contract has been upgraded to the malicious cBTC contract, the attacker called 0x804edaad method to transfer sonne WBTC to address 0x5C8d.

4/ Finally, the address 0x5C8d.. swapped 7010 sonne WBTC to 141 WBTC (~4M) for profit."

"The lending protocol had launched on Optimism less than a week ago, and its token, KOKO, less than 36 hours before the rug."

"Kokomo Finance took off with approximately $4M, deleting their website, Twitter, GitHub and Medium in the process."

"Wrapped Bitcoin deposits were rugged via changes made by the project’s deployer address. Almost $2M of tokens still remain in the project’s pools on Optimism.

But with the contracts paused and users unable to withdraw funds, the question remains…

…will they be back for the rest?"

"Whatever the future holds for Optimism, one thing’s for certain:

Kokomo has flatlined."

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 - Kokomo Finance Lending Protocol Exit Scam
!Date
!Event
!Description
|-
|March 26th, 2023 9:58:05 AM MDT
|Exit Scam Transaction
|The blockchain transaction to remove liquidity from the smart contract.
|}

== 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 ==
The total amount lost has been estimated at $4,000,000 USD.

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

== 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="rektnews-10776">[https://rekt.news/kokomo-finance-rekt/ Rekt - Kokomo Finance - REKT] (May 3, 2023)</ref>

<ref name="coinmonksmedium-10777">[https://medium.com/coinmonks/decoding-kokomo-finance-4-million-rug-pull-quillaudits-d5d027522bf3 Decoding Kokomo Finance $4 Million Rug Pull Quillaudits] (May 3, 2023)</ref>

<ref name="youtube-10778">[https://www.youtube.com/watch?v=raB0EN-Kk5Q KOKOMO FINANCE MEGA CRASHED -98%‼️ KOKO TOKEN PRICE TODAY❗ $4M EXIT SCAM SUSPECTED AS KOKOMO FINANCE - YouTube] (May 3, 2023)</ref>

<ref name="defillama-10779">[https://defillama.com/protocol/kokomo-finance Kokomo Finance - DefiLlama] (May 3, 2023)</ref>

<ref name="optimismspacetwitterarchive-10780">[https://web.archive.org/web/20230327054703/https://twitter.com/Optimism_Space/status/1638799587971588096 @Optimism_Space Twitter] (May 3, 2023)</ref>

<ref name="optimistic-10781">[https://optimistic.etherscan.io/tx/0xc3a34542b7283fc3ef9101f6c3d92b6fd666b882a4c6193ae11b027fbde39cd9 Optimistic L2 Transaction Hash (Txhash) Details | Optimism] (May 3, 2023)</ref>

<ref name="defillamatwitter-10782">[https://twitter.com/DefiLlama/status/1638934901306294272 @DefiLlama Twitter] (May 3, 2023)</ref>

<ref name="unointerntwitter-10783">[https://twitter.com/UnoIntern/status/1640092235990548485 @UnoIntern Twitter] (May 3, 2023)</ref>

<ref name="c4dotggtwitter-10784">[https://twitter.com/C4dotgg/status/1638563266548092928 @C4dotgg Twitter] (May 3, 2023)</ref>

<ref name="moemoeatwitter-10785">[https://twitter.com/moemoea_/status/1635319303540215814 @moemoea_ Twitter] (May 3, 2023)</ref>

<ref name="cryptoleeytwitter-10786">[https://twitter.com/CryptoLeeY/status/1639516507251277824 @CryptoLeeY Twitter] (May 3, 2023)</ref>

<ref name="solaceyfeelstwitter-10787">[https://twitter.com/solaceyfeels/status/1635474736972173319 @solaceyfeels Twitter] (May 3, 2023)</ref>

<ref name="ohhellohanatwitter-10788">[https://twitter.com/ohhellohana/status/1635302268466778113 @ohhellohana Twitter] (May 3, 2023)</ref>

<ref name="sidenzgiwtwitter-10789">[https://twitter.com/sidenzgiw/status/1635194374870151169 @sidenzgiw Twitter] (May 3, 2023)</ref>

<ref name="optimismeconomytwitter-10790">[https://twitter.com/OptimismEconomy/status/1639531177634844674 @OptimismEconomy Twitter] (May 3, 2023)</ref>

<ref name="ro2noazerotwitter-10791">[https://twitter.com/ro2noazero/status/1635514800796241921 @ro2noazero Twitter] (May 3, 2023)</ref>

<ref name="happykiyowokaytwitter-10792">[https://twitter.com/happykiyowokay/status/1635407815622922241 @happykiyowokay Twitter] (May 3, 2023)</ref>

<ref name="pamungkhaztwitter-10793">[https://twitter.com/Pamungkhaz/status/1635410479458959360 @Pamungkhaz Twitter] (May 3, 2023)</ref>

<ref name="0xguardtwitter-10794">[https://twitter.com/0xGuard/status/1636613655679606784 @0xGuard Twitter] (May 3, 2023)</ref>

<ref name="0xguardtwitter-10795">[https://twitter.com/0xGuard/status/1638433725540171777 @0xGuard Twitter] (May 3, 2023)</ref>

<ref name="cryptonotifybottwitter-10796">[https://twitter.com/CryptoNotifyBot/status/1639569704368091139 @CryptoNotifyBot Twitter] (May 3, 2023)</ref>

<ref name="semqngattwitter-10797">[https://twitter.com/semqngat/status/1635187340896509952 @semqngat Twitter] (May 3, 2023)</ref>

<ref name="leehc0xtwitter-10798">[https://twitter.com/leehc0x/status/1635549519214698496 @leehc0x Twitter] (May 3, 2023)</ref>

<ref name="pirotreborntwitter-10799">[https://twitter.com/PirotReborn/status/1635573729664319488 @PirotReborn Twitter] (May 3, 2023)</ref>

<ref name="cointelegraphtwitter-10800">[https://twitter.com/Cointelegraph/status/1640227158743449600 @Cointelegraph Twitter] (May 3, 2023)</ref>

<ref name="cointelegraph-10801">[https://cointelegraph.com/news/4m-exit-scam-suspected-as-kokomo-finance-flies-off-radar-token-plunges $4M ‘exit scam’ suspected as Kokomo Finance flies off radar, token plunges] (May 3, 2023)</ref>

<ref name="kokomofinancearchive-10802">[https://web.archive.org/web/20230328012441/https://kokomofinance.medium.com/ Medium] (May 3, 2023)</ref>

<ref name="kokomofinancegithubarchive-10803">[https://web.archive.org/web/20230328012441/https://github.com/KokomoFinance https://web.archive.org/web/20230328012441/https://github.com/KokomoFinance] (May 3, 2023)</ref>

<ref name="kokomofinancetwitterarchive-10804">[https://web.archive.org/web/20230327052512/https://twitter.com/KokomoFinance @KokomoFinance Twitter] (May 3, 2023)</ref>

<ref name="kokomofinancearchive-10805">[https://web.archive.org/web/20230314182504/http://kokomo.finance/ Registrant WHOIS contact information verification | Namecheap.com] (May 3, 2023)</ref></references>