CertiK Audit Firm: Collaborating with Law Enforcement to Track Hackers, April Flooded with Rug Pull Projects?

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CertiK: Contacted Legal Authorities in the UK and US to Assist in Tracking Down

Earlier reports stated that the L2 solution zkSync era ecosystem DEX (decentralized exchange) Merlin was hacked on the first day of fundraising, resulting in a theft of $1.8 million. CertiK pointed out that the reason for this Rug pull was due to some core members abusing the privileges of the owner's wallet and refusing to cooperate in verifying their real identities. In reality, it was a private key issue rather than exploiting a vulnerability.

CertiK stated that the lack of cooperation from insiders will make it difficult to recover the funds, but they are committed to collaborating with law enforcement agencies and have submitted evidence to relevant agencies in the US and UK.

The good news is, CertiK announced today (5th) on their Twitter that they successfully froze the stolen funds of $160,000 with the help of partners: "With the help of our partners, we have successfully frozen $160,000 of stolen funds."

This lack of cooperation has complicated our efforts to validate and aid victims. We are focusing on working with law enforcement and have submitted information to relevant US & UK agencies.

We are exploring all possibilities to fight exit scams with the $2M we’ve committed.

— CertiK (@CertiK) May 4, 2023

From the grand fundraising of Merlin to the official claim of smart contract vulnerabilities being exploited during the hack, and then subsequently CertiK, the main auditing institution, confirming it as a Rug pull (malicious fund withdrawal), all within less than a week, inevitably raises questions about the necessity of audits and even the security of blockchain projects themselves.

Inventory of Recent Losses Due to Blockchain

With the recent rise in meme coins, various types of altcoin projects have sprung up one after another. Besides causing a surge in Gas fees on various public chains, there have also been multiple cases of significant amounts being stolen due to scams, program vulnerabilities, or Rug pulls.

According to the on-chain data database Rekt database, a total of $78 million was lost on-chain in April, with only $950,000 successfully recovered. It can be said that once caught in a scam or malicious fund withdrawal, the funds will be nearly impossible to retrieve.

It is worth noting that there have been four Rug pull projects within the past week alone, taking advantage of the high profile of meme coins to engage in illegal activities. Investors are reminded to conduct thorough research when choosing investment targets and to remain vigilant about risks and security, refraining from investing amounts they cannot afford to lose in high-risk projects.