AFK Finance Goes AFK

Notice: This page is a freshly imported case study from the original repository. The original content was in a different format, and may not have relevant information for all sections. Please help restructure the content by moving information from the 'About' and 'General Prevention' sections to other sections, and add any missing information or sources you can find. If you are new here, please read General Tutorial on Wikis or Anatomy of a Case Study for help getting started.

Notice: This page contains sources which are not attributed to any text. The unattributed sources follow the initial description. Please assist by visiting each source, reviewing the content, and placing that reference next to any text it can be used to support. Feel free to add any information that you come across which isn't present already. Sources which don't contain any relevant information can be removed. Broken links can be replaced with versions from the Internet Archive. See General Tutorial on Wikis, Anatomy of a Case Study, and/or Citing Your Sources Guide for additional information. Thanks for your help!

AFK Systems Finance

As a completely anonymous team, AFK Systems Finance launched a new platform including a vault, with known exploits in the smart contract hot wallet. They then got a couple of smart contract auditors to audit the smart contract, presumably until they found one which wouldn't do the audit right away. When the audit results came back, they used their exploits to steal all funds from users and disappeared.

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

About AFK Systems Finance

"AFKsystem.Finance is a Decentralized Yield Farming Ecosystem created by Yield Farmers, for Yield Farmers. Our $SILVER token ensures that AFKsystem.Finance is owned by its users. $SILVER will only be rewarded to users who benefit the protocol, thus there will be no single asset farming pools, only single asset Missions (AAVE Vaults)." "[T]the address used in the [contract] was filled using tornado[cash]" on July 8th.

"AFKsystem.Finance launching in less than 24 hours, Polygon newest DeFi Yield Vaults! Partnered with Dfyn exchange, join us at our launch on 19th Aug UTC 2PM! Fairly Launched!"

"Our official auditing partner, @0xPaladinSec, has funnily always pointed out these governance privileges to change the router as either high severity or medium severity." "AFK Systems cancelled their Paladin audit in favor of another auditor."

"On the 21st of August, AFK contacted Obelisk for an audit of their smart contracts. The actual audit started at the beginning of September."

"During the audit, we found multiple instances of severe issues that could be used maliciously. As part of our auditing process, these first draft notes were sent to AFK with proposed solutions to solve these issues." "Afksystem.finance just rugged all their vaults for a total of about $12m in profit." "On the 11th of September AFK rugged in the middle of the ongoing audit. It’s important to note that there are great risks associated with un-audited projects, and an ongoing audit doesn’t imply that the project is safe to use."

"All though afksystem had seriously trimmed down their governance privileges. They had kept one important privilege... Changing the router through which the harvested tokens are sold." "This router can then be changed for literally anything... A wallet, a malicious contract, an NFT of a rock, you name it! Going to our beloved @bscscan, they opted for a malicious contract."

"The owner of most vaults starts changing the governance address of the vaults to an exploit contract"." "Using the contract, they were able to execute multiple steps in one transaction." "The contract calls panic on vaults, withdrawing tokens from underlying farming contracts." "It change the swap router to a malicious address." "It call resetAllowances() so the new router could drain the vaults." "It then transfer the funds." "[The receiving address] proceeds to sell off tokens." "The rug also used dai to bridge funds to the ETH chain. ~ 2,8 M Dai are transferred from AfkOwner to the final address."

"What do we all have to do before interacting with uniswap? Give token approval." "The afksystem vaults gave infinite approval over the staking token to this untrusted contract deployed by the malicious afksystem owners." "After a simple emergencyWithdraw call to move the funds into the strategy, the contract had free access to all funds through the approval and the system would go AFK indefinitely."

"[I] got scammed by AFKFI (afk.finance) on uniswap. [T]he scammer took out all of the eth and afkfi and the liquidity is 0 now. expensive lesson learned. there goes most of my uni airdrop. [S]tay safe out there guys, ima take the lose and carry on, nothing [I] can do other then learn from this."

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.

Key Event Timeline - AFK Finance Goes AFK

Date	Event	Description
September 10th, 2021	Main Event	Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.

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 $12,000,000 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?

General Prevention Policies

There are many ways to prevent this from having known team members and not storing customer funds in smart contract hot wallets.

Individual Prevention Policies

No specific policies for individual prevention have yet been identified in this case.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Policies for platforms to take to prevent this situation have not yet been selected in this case.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No specific regulatory policies have yet been identified in this case.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.