IRYS AI Programmable Blockchain Revolution Backdoor Rug Pull

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IRYS AI Logo/Homepage

IRYS AI was promoted as a groundbreaking blockchain platform enabling programmable, on-chain data interaction for smart contracts and AI agents. It introduced a multi-ledger architecture, the IrysVM execution layer, and a hybrid consensus model, positioning itself as a next-gen solution for decentralized AI and data storage. However, the project was exposed as a scam when investigators discovered a hardcoded backdoor in the token contract that allowed a designated wallet to bypass security checks and drain user funds. The deployer used this vulnerability to steal approximately $69.6K in a single transaction, revealing the malicious intent behind the project. Most have considered this a rug pull. Twitter/X is deleted while the website is still online.

About IRYS AI

IRYS AI claimed to be the first blockchain platform where data wasn’t just stored but made programmable—allowing users to write logic directly onto data for native onchain interaction by smart contracts and AI agents. It promised a revolutionary architecture with a multi-ledger system that validated data through a Submit Ledger before moving it to a Publish Ledger for long-term storage. Additional ledgers were advertised to support customizable storage durations, positioning IRYS as a data-first chain focused on flexibility, verifiability, and permanence.

The project also introduced the IrysVM, a supposedly high-performance, EVM-compatible execution layer designed to bring computation and storage under one system. According to its documentation, this would enable smart contracts to directly manage and enforce rules on programmable datasets, AI models, and inference proofs—eliminating the need for external oracles or databases. IRYS AI marketed this as a key innovation that would usher in a new era of decentralized AI automation.

To secure its network, IRYS AI promised a hybrid consensus model combining useful Proof of Work and staking. This model was touted as a way to ensure decentralization, prevent miner centralization, and maintain honest data storage. Prospective developers were encouraged to start building through the platform's tools and educational resources like the Irys Academy, which offered structured learning for both beginners and advanced blockchain users.

IRYS AI was a smart contract launched on May 10th, 2025. The contract was promoted on May 19th via Twitter/X.

The Reality

Unfortunately, investigators have confirmed a backdoor in the token contract that allowed the designated `_taxWallet` to bypass standard permission checks, enabling the token deployer to drain user funds.

What Happened

IRYS AI, a blockchain project claiming to revolutionize programmable data and decentralized AI, was exposed as a scam after a built-in backdoor enabled the theft of $69.6K in a deliberate rug pull.

Key Event Timeline - IRYS AI Programmable Blockchain Revolution Backdoor Rug Pull

Date	Event	Description
May 10th, 2025 4:44:12 PM MDT	IRYSAI Smart Contract Launch	The IRYSAI smart contract is first launched on the Binance Smart Chain.
May 19th, 2025 6:39:00 AM MDT	Original Responses To Post	An initial post is made about the project, which appears to have gotten some engagement from different Twitter/X users.
May 20th, 2025 4:08:49 AM MDT	Tax Wallet Address Updated	The tax wallet is set to the attacker's wallet and a rug pull is completed to empty the funds to the attacker's wallet. This happens in two separate transactions, however both transactions are placed in the same block on the Binance Smart Chain.
May 20th, 2025 8:16:00 PM MDT	Post By TenArmor Published	TenArmor publishes an alert that a Rug Pull has occurred involving the IRYSAI token on the Binance Smart Chain (BSC), resulting in a loss of approximately $69,600. They have isolated the vulnerability to be a backdoor in the token's smart contract that allows the designated `_taxWallet` to bypass standard allowance checks, effectively granting it unrestricted access to user funds. The deployer address `0xc4ce` assigned this privileged role to address `0x6233` in a setup transaction, which was later used to execute the Rug Pull. This exploit was deliberately built into the contract.

Technical Details

The scam was enabled by a backdoor in the token's smart contract that allows the designated `_taxWallet` to bypass standard allowance checks, effectively granting it unrestricted access to user funds. The deployer address `0xc4ce` assigned this privileged role to address `0x6233` in a setup transaction, which was later used to execute the Rug Pull. This exploit was deliberately built into the contract.

Total Amount Lost

Losses were reported by TenArmor as $69.6k.

The total amount lost has been estimated at $70,000 USD.

Immediate Reactions

Roughly $69.6K was stolen in a single transaction, revealing to the wider community that the project had been maliciously engineered from the start. What was marketed as a cutting-edge blockchain for programmable data turned out to be a carefully disguised scam.

Ultimate Outcome

TenArmor posts a report, declaring the final transaction of the project as a "rug pull".

It appears that the original Twitter/X account was changed from username BSCIRYSAI to Use8BITAI.

Total Amount Recovered

It is unclear if any recovery will be possible. While the website remains online, the project has deleted their official Twitter/X account.

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

Ongoing Developments

The project website appears to still be online. The individuals behind the project appear to have moved on to the launch of a new 8BIT AI project.

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.