Newdex Fake EOS Exploit

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Newdex

The NewDex exchange platform was exploited through a fake EOS attack, which created 11,803 counterfeit EOS and used them to trade other tokens. The Newdex platform took responsibility and covered the loss.

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

About Newdex

"NewDex is a decentralized exchange based on EOS blockchain." "Newdex was launched on the EOS on August 8, 2018. It is the leading order-book decentralized Exchange for on-chain matching and settlement in the entire net. Newdex has reached cooperation with more than 20 digital coin wallets (TokenPocket, imToken, Bitpie etc.) to perfectly present the decentralized transaction experience “matching via smart contract and receiving assets while transaction completed”. On January 19, 2021, Newdex has completed the new upgrade, from an order-book decentralized Exchange to an aggregate decentralized Exchange, and has successfully aggregated the depth of Newdex's limit orders and the depth of liquidity pools of the major Swaps on the EOS (Defibox, Defis Network, etc.), allowing EOS users to obtain the best depth and best price trading experience, which has become the first trading entry in the EOS ecosystem."

"Newdex is committed to taking advantage of the composability of DeFi to aggregate the depth of DEX in multiple chains, develop the aggregated DEX with "best depth, best price and best experience", provide users with good decentralized trading experience, and become multi-chain DEX trading entry."

"[A]t 2 o'clock in the afternoon, EOS contract account oo1122334455 issued a token named "EOS", and allocated one billion fake EOS tokens to EOS accounts in full dapphub12345, and then transfer the fake tokens to the account iambillgates (the account that carried out the attack) from this account. After the attacking account used a small fake EOS to verify the attack, a large-scale attack was carried out from 14:31:34 to 14:45:41. There were 11,800 fake EOS listing orders to buy BLACK, IQ, and ADD, and all of them were traded."

"The hackers created a new EOS-based token, also named “EOS,” and used it to illegitimately purchase BLACK, IQ, and ADD tokens from exchange service Newdex. The company has since confirmed the hack."

"The fact NewDex does not verify tokens via its smart contracts leads one to the conclusion that NewDex is just a user account handling the users’ trades and traders are under the impression it’s a decentralized exchange!"

"Further investigation on NewDex infrastructure revealed that Newdex doesn’t use smart contracts to verify the tokens users send." "[T]he fake EOS tokens were exchanged for real ones that were transferred to Bitfinex. The hackers managed to transfer 4,028 tokens three times, worth around $19,450 at current values. The total lost funds by the exchange’s users are estimated around $58,000. The exchange took responsibility for the incident and the entire loss and had fixed the issue and resumed normal transactions again."

“The Newdex team took responsibility for the entire loss and had fixed the problem in the first place and resumed normal transaction. All Newdex users, please don’t worry and use it at ease”.

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 - Newdex Fake EOS Exploit

Date	Event	Description
September 14th, 2018	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 $62,000 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

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.