The Allegations Against SafeMoon by the SEC

The United States Securities and Exchange Commission (SEC) has recently accused SafeMoon, a decentralized financial project, of fraud and violations of security rules. These allegations stem from a significant system flaw that was exploited in March, resulting in a loss of 8.9 million BNB (Binance Coin) from the Ledger. The digital assets associated with this security breach were routed through centralized exchanges, raising concerns about potential legal consequences.

Official response from SafeMoon

The SEC’s allegations have caused a stir within the SafeMoon community, prompting a response from the project itself. On November 2, 2023, SafeMoon took to Twitter to address the concerns. They stated that they were reviewing the recent news and taking the issues very seriously. They promised to provide further information as soon as possible and assured their users that their focus remained on delivering for their users, building their vision, and moving forward on their mission.

Analysis of the breach by Match Systems

To delve into the technical aspects of the breach, blockchain analysis firm Match Systems conducted an investigation. They identified a vulnerability related to SafeMoon’s “Bridge Burn” feature in its smart contract. This flaw allowed malicious actors to execute the “burn” function on SafeMoon (SFM) tokens at any address without authorization. As a result, 32 billion SFM tokens were transferred from SafeMoon’s liquidity pool to the hacker’s address, causing a sudden increase in token value. The hackers took advantage of this spike by trading SFM tokens for BNB at inflated rates, ultimately acquiring 27,380 BNB.

The discovery of a vulnerability with a software update

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Further examination by Match Systems revealed that the vulnerability was not present in the initial design but emerged due to a software update on March 28. This timing aligns with the exploit, leading to suspicions of insider involvement. The attacker, claiming the breach was unintentional, has expressed intentions to communicate and return 80% of the stolen funds.

In conclusion, the SEC has levelled accusations against SafeMoon for fraud and security rule violations. SafeMoon has responded, promising to address the situation and continue their focus on their users and their mission. The analysis of the breach by Match Systems has shed light on the technicalities and potential insider involvement. The attacker has offered to return a portion of the stolen funds.

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By Team