The DeFi arena is teeming with revolutionary projects whose cryptocurrencies often make impressive leaps, but fraud and theft are abundant.

Where we write from time to time about it in the Arab Bitcoin, referring to it for the purpose of advice and warning against it and the model it adopts.

Recently, the developers of the “Compound Finance” project pulled the rug from the legs of traders and investors, and the amount of fraud was estimated at $12 million.

Below are the details of the scam.

What is the Compounder Finance Project?

Late last month, a group of anonymous developers rolled out a project called “Compounder Finance” and a digital currency called “Compound Finance.”CP3R“.

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It appears from the name of the project that it contains some of the components of the “Compound” project and the “Keep3r” project, but in fact it is far from them and has nothing to do with them.

With some limited information about the project online, Compounder Finance provides a tool that allows to generate returns by depositing cryptocurrencies in different protocols.

The CP3R cryptocurrency has made a dramatic rise, significantly increasing returns, to the point that they are much higher than those offered by platforms and other decentralized finance projects.

This means that users were willing to deposit millions of dollars into the contract, even though the project was just getting started, but the greed for high returns in a short amount of time is always what decimates investors.

Fraud:

After the project earned a reputation for yielding higher returns than any other decentralized finance project, it was offering users regular returns between Sunday and Monday.

I reassure the investors of the project, after which “Compounder” announced a new strategy to achieve returns and lock the funds for a certain period and obtain a greater return.

Read:More than half of all Cardano wallets are stockpiling and “stacking” ADA cryptocurrency

Since many users thought these strategies were legitimate, they kept their money in the protocol.

but …

Things were not going well, as a malicious contract function allowed the contract owner to manipulate the pool to withdraw all the money to his own address.

pointed out Programmer “Vasa” in his blog said:

Compounder Finance and the strategy publisher called “inCaseStrategyTokenGetStuck()” in the “StrategyController” feature misused the withdrawal function, and allowed the developer to manipulate users’ funds.

As a result of this manipulation, $12.5 million in WETH, YFI, UNI and many different stablecoins were stolen.

Cryptocurrency “CP3R” Collapse:

The cryptocurrency “CP3R” has collapsed since the fraud was carried out.

even it’s happen trade The Ethereum-based cryptocurrency CP3R is now trading at $0.27, down more than 99.5% from its all-time high of $94.

The scam affected large investors in “yield farming”.

Among them was one of those affected, who published the following:

It is only a matter of time before a criminal authority finds and arrests you.

Read:Cryptopia takes another step towards returning users’ money

You will have no time or budget limit to provide as detailed a report as possible about your scam.

Message to a scammer Just scam nearly 10,800,000 dollars

I personally almost lost. Million dollars and the rest of the crypto community almost lost. $10 million off your rug.

– DefiYield.info 👨‍🌾🚜 (defiyield_info) December 1, 2020

This investor also created a “Telegram” group that brings together those affected by the attack to try to reach the fraudster and pursue him judicially.

What can be said about the “Compounder Finance” project is that it belongs to the category of digital projects that look great and incredibly good.

And as it is customary about such projects with the tragic endings of theft and fraud of users’ money.

So if you see a project that promises high returns in a short period of time and a group of users cheer for it, running away is safer.

Read also:

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The worst hacks that occurred in the cryptocurrency market in 2020