Merlin Chain Discord Hack

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Merlin Chain Logo/Homepage

Merlin Chain is a layer 2 protocol for bitcoin, aiming to make bitcoin fun again. The Merlin Chain official Discord was hacked, right in the middle of their airdrop campaign. From what can be determined, the post was removed very quickly, and it's unclear if there were any affected users.

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

About Merlin Chain

"Merlin Chain - The Native Bitcoin Layer2 Unleashing Bitcoin's Potential with Native L1 Assets, Users and Protocols"

"Merlin Chain is a Bitcoin Layer 2 that integrates the ZK-Rollup network, decentralized oracle network, Data Availability, and on-chain BTC fraud proof modules. Merlin Chain is committed to empowering Bitcoin's native assets, protocols, and products on Layer1 through its Layer 2 network, to Make Bitcoin Fun Again.

Merlin Chain leverages zero-knowledge proofs submitted to Bitcoin for verification of commitments, providing enhanced support to the Bitcoin network. It allows challengers to present fraud proofs on disputed matters, utilizing Bitcoin's robust consensus mechanism to ensure the security of the Merlin Chain network. This ensures a secure, practical, comprehensive, and economically efficient network environment for users within the ecosystem.

Merlin Chain aims to expand the native innovation from Bitcoin Layer 1 to Layer 2. This includes supporting all kinds of Bitcoin Layer 1 assets, building dApps with 'fully on chain' spirit of Bitcoin, and community driven assets launching method. Merlin is trying to build a EVM compatible chain for Bitcoin, to unleash the potential of Bitcoin and Ordinals."

"Merlin Chain offers low fees and high scalability as an EVM-compatible chain, ensuring swift transaction processing and enhancing transaction liquidity."

"Merlin Chain supports popular Bitcoin protocols such as BRC20, BRC420, Bitmap, Atomicals, Pipe, Stamp, and more, enabling a more extensive user base to interact on Bitcoin Layer2."

"Merlin Chain has implemented ZK-Rollup to enhance efficiency and scalability, with sequencer nodes responsibly managing data transmission via decentralized Oracles, ensuring transparency and security."

"Merlin Chain continues its commitment to fair launches and community-driven native innovations on Layer2, dedicated to delivering unique solutions designed for the Bitcoin network and its users."

"Singapore, April 11th, 2024 — Merlin Chain, a trailblazer in Bitcoin-native layer 2 (L2) protocols, has rolled out a comprehensive suite of security measures alongside revolutionary chain architecture. This initiative follows the platform's remarkable achievement of securing a $3.5 billion Total Value Locked (TVL) just 30 days after its mainnet launch, attracting an impressive cohort of over 200 projects to its rapidly expanding ecosystem."

"Claim your $MERL Tokens Now! Round 2 LIVE NOW! Attention, Merlin community! Round 2 claims are live now. You can now claim your $MERL tokens at our official airdrop site!"

"Merlin Chain discord is hacked. DO NOT Interact."

"According to community feedback, the official Discord server of Merlin Chain appears to have been targeted in a hacker attack, where a management account posted a notification containing a phishing link."

"Looks like they caught the hacker quickly. There may still be some dangerous links, so it's probably best to wait a while."

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 - Merlin Chain Discord Hack

Date	Event	Description
March 26th, 2024 11:00:00 PM MDT	Airdrop Marketing	The Merlin Chain publishes promotion of "magical bonuses" which are available.
April 17th, 2024 12:04:00 AM MDT	Airdrop Marketing	The official MerlinLayer2 account publishes about the airdrop link.
April 24th, 2024 7:26:00 AM MDT	cryptfnt Warning	Twitter user cryptfnt posts
April 24th, 2024 7:27:00 AM MDT	MailmanBTC Notice	Tweet warning "Merlin Chain discord is hacked. DO NOT Interact."
April 24th, 2024 7:32:00 AM MDT	antefex_moon Tweet	antefex_moon notes that the discord has been hacked.
April 24th, 2024 7:36:00 AM MDT	cryptfnt Update	cryptfnt posts an update in Japanese stating it "[l]ooks like they caught the hacker quickly" which suggests that the hack may already have been resolved.
April 24th, 2024 8:40:00 AM MDT	Blockbeat Article Published	Blockbeat publishes a warning about the phishing link (in Chinese).
April 24th, 2024 9:02:44 AM MDT	PANewsLab Article	A PANewsLab article is published about the incident, which allows it to be listed on the SlowMist website.
April 24th, 2024 10:25:00 AM MDT	Staff Feedback	According to feedback from Merlin Chain staff reported by user jsteigled, "the problem has been resolved and Discord is now back to normal".

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 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

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

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.