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SafeMoon Navigates SEC Concerns and Addresses Exploit Aftermath

SafeMoon Navigates SEC Concerns and Addresses Exploit Aftermath

Key Takeaways

  • SafeMoon faces SEC allegations and is actively seeking a resolution while continuing to serve its users.
  • An exploit in March, attributed to a smart contract vulnerability, led to a loss of $8.9 million in crypto.
  • Speculations of insider involvement arise due to the coincidence of the exploit with a recent update.

SafeMoon, a notable decentralized finance (DeFi) entity, recently came under the radar of the US Securities and Exchange Commission (SEC) due to allegations of violating security regulations and fraud.

In light of these charges, SafeMoon took to X (previously known as Twitter) to clarify its stance. Their message highlighted a steadfast commitment to advancing the project's overarching vision and unyielding dedication to its user base.

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Crypto Research Fundamentals: How to DYOR (Animated Explainer)

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Earlier this year, SafeMoon faced a significant setback when it was exploited, leading to a substantial financial loss of $8.9 million in BNB (BNB).

Observations indicate that the funds associated with this breach have been channeled through centralized exchanges.

Match Systems, a reputable blockchain analysis firm, has posited that the movements of these funds could be very important to legal entities.

Elaborating on the breach, Match Systems shed light on the modus operandi of the attackers. According to Match Systems, malicious actors exploited a weak point in SafeMoon's smart contract, particularly linked to the "Bridge Burn" feature. This loophole allowed them to arbitrarily execute the "burn" function for SafeMoon (SFM) tokens.

Consequently, a staggering 32 billion SFM tokens were relocated from SafeMoon's liquidity pool address to its deployer address. This action triggered a swift spike in the token's value. Capitalizing on this inflation, the attacker swapped a portion of SFM tokens for BNB, culminating in the transfer of 27,380 BNB to their own account.

Interestingly, upon closer inspection, Match Systems discovered that this specific vulnerability in the smart contract was not present in its older versions and only appeared in the March 28th update. What is also interesting is that the update was launched on the same day the exploit happened. This coincidence has kindled speculations regarding a possible insider's role in the breach.

Moreover, the individual allegedly behind this exploit later claimed the protocol's breach was unintentional. They also expressed plans to initiate dialogue to return a significant portion (80%) of the illicitly acquired funds.

SafeMoon's recent entanglements with both regulatory allegations and technical vulnerabilities underscore the complexities inherent in the decentralized finance landscape. As the project addresses these challenges head-on, its actions in the coming days will be pivotal in shaping its credibility and future trajectory in the ever-evolving world of blockchain and cryptocurrency.

Gile K., Market Sentiment Analyst
Gile is a Market Sentiment Analyst who understands what public events may form what emotions. Her experience researching Web3 news and public market messages – including cryptocurrency news reports, PRs, and social network streams – is critical to her role in helping lead the Crypto News Editorial Team.
As an intelligent professional in public relations, together with the team, she aims to determine real VS fake news patterns, and bring her findings to anyone searching for unbiased news and events happening in the FinTech markets. Her expertise is uncovering the latest trustworthy & informative Web3 announcements to the masses.
When she's not researching the trustworthiness of mainstream stories, she spends time enjoying her terrace view and taking meticulous care of her outdoor environment.

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