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Kokomo Finance Exit Scam

  • Project: Kokomo Finance (Optimism-based lending protocol)
  • Exploit_type: Smart contract loophole → Insider Exit Scam
  • Loss: ~$4 million
  • Entry_point: Wrapped Bitcoin token contract (cBTC) via reward speed and borrow controls
  • Exploit_vector: The deployer manipulated contract logic to withdraw user-deposited wrapped Bitcoin, swapping it out for profits and immediately abandoning platform
  • Severity: Critical
  • Attack_steps:
    • Team reset the rewardSpeed and paused borrowing in the cBTC contract
    • Upgraded the deployed cBTC implementation to malicious code
    • Approved over 7,000 Sonne Wrapped Bitcoin (So-WBTC) for transfer from the contract
    • Transferred ~7,010 So-WBTC to attacker-controlled address (0x5a2d…)
    • Swapped So-WBTC to 141 WBTC (~$4 million) via DEX
    • Simultaneously wiped social media and website (‘fly off radar’)
  • Impact: Approximately $4 million stolen; KOKO token crashed ~95–97%; TVL plummeted
  • Exploitability: High (privileged control over token contracts and upgrades)
  • Root_cause: Full control retained by deployer over proxy contracts, enabling contract logic manipulation and fund extraction without oversight
  • Resource:Link