Hacker Creates Memecoin with Proceeds from RocketSwap Hack

Decentralized crypto exchange RocketSwap was hacked yesterday 15 August by an unknown attacker. As a result, 741 ETH (about $870,000) was lost, after which the hacker sent the funds to Ethereum and created a memecoin, LoveRCKT.

According to the RocketSwap team, the attack was as a result of a series of lapses, one of which was use of offline signatures in the launchpad deployment, and a decision to store private keys on the server.

The team has since apologized to users in an update on the situation on RocketSwap official Twitter handle.

“We are sorry to inform you that the team needed to use offline signatures when deploying the launchpad and put the private keys on the server. A brute force hack of the server was detected, and due to the proxy contract used for the farm contract, there were multiple high-risk permissions that led to the transfer of the farm’s assets,” it said.

Some social media users have accused the team of carrying out a rug pull. For example, a Twitter user wrote:

“Yeah, it wasn’t at ALL them who rugged it twice in one week. Give me a break. Why would they change the proxy literally right before it happened then completely act like it’s not a big deal? Use your head.”

However, the team has maintained that the attack was the work of an external attacker who executed a brute force assault on a cloud server used by the project. The attack then allowed the attacker to access private keys, making it possible to transfer assets from the exchange’s yield farm.

Attacks on Base Layer 2

Base is a Layer 2 network was recently launched by Coinbase on Ethereum. The blockchain offers a safe, low-cost, developer-friendly way to build on-chain. Because of the attractive features it offers, it already has projects like RocketSwap launching on it.

The attack on RocketSwap was unprecedented, and happens to be the second significant attack on the network, the first being the attack on another DEX, LeetSwap, which led to the loss of $630,000 on July 31.

According to the update on Twitter, the team has taken immediate action to prevent further losses by shutting down the yield farm.

“We shut down the farm to prevent further damage. The team is currently working on an emergency plan and the Telegram group has been banned for the time being. The loss of farm assets is only a concern, DEX is not affected in any way. We are very sorry for your loss,” the team further stated.

The new memecoin

Following the hack, the attacker moved the stolen assets from the Base blockchain to Ethereum and quickly created a memecoin named LoveRCKT, details from blockchain security firm PeckShield indicate.

The new memecoin was paired with 400 ETH of liquidity on Uniswap, and the price quickly tripled within just 24 hours, rising from $0.00000001 to $0.00000003 despite being deployed by a hacker. It however later dropped by more than 90% in what appeared to be a rug pull.

The exploiter has also sold 2.5 trillion LoveRCKT tokens for 20.33 WETH, PackShield further stated in a Twitter update. Meanwhile, the token is still listed on Dexscreener and trading as at the time of reporting the story.

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