TurtleDex Exits with User Funds

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TurtleDex

An audited smart contract allowed the creators to remove funds, despite naming the project after a turtle, which would not have had hands long enough to use a keyboard.

Nothing appears to have been done to resolve the issue for investors, who are still out millions of dollars.

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

About TurtleDex

TurtleDex was "a decentralized finance (DeFi) file storage project on the Binance Smart Chain (BSC)" "TurtleDex touted itself as a decentralized storage platform for users. It [promoted itself] as a “big data protocol” to help users keep data and preserve files without needing to keep them on their computer." "The team opened their liquidity pools on two major BSC DEXs: Pancakeswap and Apeswap." "The platform product launch was met with high expectations and excitement." "TurtleDEX raised 9000 BNB tokens worth $2.5 million in a pre-sale round on March 15." "The team raised their entire pre-sale round in just two hours."

"TechRate, an analytical agency that concentrates on blockchain-based platforms, audited the protocol. The analysts did not discover rigorous security issues, and the project was probably safe."

"[W]hen community members asked the TurtleDex team whether investments in the project carried risks of deception, they, playing on the name of the project, replied that the turtle had “too short hands” for this."

"On March 19, just days after their presale of 9,000 Binance tokens worth roughly $2.5 million, TurtleDex, a Binance Smart Chain (BSC) DeFi project, performed a rug pull on its investors. The project’s developers drained funds from trading pools on PancakeSwap and ApeSwap, converted them to Ether and send the funds to large, centralized exchanges in an attempt to cash out. While the project had previously been audited, no critical security issues were previously identified." "The situation comes shockingly to everyone due to the organic hype the project has achieved."

"Liquid[i]ty on both @ape_swap & @PancakeSwap [was removed] & swapped to $ETH, split to 9 wallets, all sent to @binance." "Based on TurtleDEX team wallet transactions, the DeFi project emptied the raised amount from trading pools on Pancake Swap and Ape Swap and transformed the ETH liquidity. They then transferred the funds to Binance exchange wallets to be traded."

"The social media accounts associated with the protocol were deleted soon after the exit." "At the same time, the TurtleDex website was unavailable, messages in the project’s Telegram group were banned, and administrator accounts were deleted." "[T]he owners instantly deleted TurtleDex’s telegram, the official website, and the Twitter page." "[T]he exchange has not made any official remark at the moment."

"$2.4 million in funds were drained from trading pools on major BSC DeFi exchanges Ape Swap and Pancake Swap."

"Now users are questioning the reputations of Apeswap and Jetfuel Finance, which have entered into a partnership with TurtleDex. Jetfuel subsequently delisted the TurtleDex token. The collaboration was to provide incentives to provide liquidity." "Jet Fuel Finance, a yield farming protocol that partnered with TurtleDex, confirmed the scam." "We are just as shocked as everyone to see this unfold."

"ApeSwap & Jetfuel perform due diligence on every project to make sure we’re bringing the best for our communities. But that can only go so far. Each one of our partners is a separate project and we must trust them to deliver, do the right things, and be responsible for their own investors and communities."

"All eyes are on Binance to mitigate the damage to investors’ pockets. So far there has been no word, but a tweet from company head CZ earlier this week clarified that “We actually help with a few rug pulls recently too.” Binance did not respond to Decrypt's request for comment." "[S]ome users are now asking Binance to intervene by freezing the stolen funds and reimbursing the affected investors."

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 - TurtleDex Exits with User Funds

Date	Event	Description
March 18th, 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 $2,500,000 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

In our framework, we advise that all customer funds should be held in a cold storage multi-signature arrangement, and that signatories should be trained and background checked.

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.