IPC Token TransferTime Swap Contract Vulnerability
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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.[1][2][3][4][5][6][7][8]
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.
| 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
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.
References
- ↑ BNB Smart Chain Transaction Hash (Txhash) Details | BscScan (Accessed Feb 12, 2025)
- ↑ @pennysplayer Twitter (Accessed Feb 12, 2025)
- ↑ @TikkalaResearch Twitter (Accessed Feb 12, 2025)
- ↑ @heimdql Twitter (Accessed Feb 12, 2025)
- ↑ AI IPC (IPC) Token Tracker | BscScan (Accessed Feb 12, 2025)
- ↑ @CertiKAlert Twitter (Accessed Feb 12, 2025)
- ↑ Smart Contract Creation Transaction (Accessed Feb 12, 2025)
- ↑ https://app.blocksec.com/explorer/tx/bsc/0x5ef1edb9749af6cec511741225e6d47103e0b647d1e41e08649caaff66942a91?line=9 (Accessed Feb 12, 2025)