Major cryptocurrency exchange Binance has been able to recover 99.9% of the funds stolen by exit scam DeFi project Wine Swap, the firm said in a press release on 4 November.
According to the announcement, the Binance Security team was able to secure $344,000 worth of cryptocurrency stolen by automated market maker Wine Swap back in October. The scam project was launched on the Binance Smart Chain back on 13 October, and was able to raise around $345,000 in crypto within an hour, which were then transferred to the creator’s personal address.
The Binance team said in a statement:
“With new DeFi products emerging daily, it is difficult to verify the legitimacy of each and every project. We will continue to emphasize the importance of conducting individual due diligence and research before participating to avoid cases such as Wine Swap. It is important to remember that scams ending with the full recovery of lost funds are very rare.”
After acquiring the funds, the bad actor proceeded with spreading the 19 different cryptocurrencies to various platforms, in an attempt to pull them off of the Binance Smart Chain. In order to move them cross-chain, the attacker first swapped the funds to the Binance Chain, and later to the Ethereum blockchain. A small portion of the funds was also sent to two exchanges and to Binance’s centralized bridge, which was promptly frozen.
After being alerted of the scam, the Binance Security team immediately took action, and through on-chain analysis was able to follow the transactions, and eventually identify the bad actor. The team then contacted the perpetrator, who promptly returned the stolen funds to the exchange, though in the form of stablecoins, as he had enough time to convert almost all the funds. The exchange said:
“Analysis of the transfers to and from Wine Swap allowed us to identify which addresses fell victim to the scam and calculate exactly how much was owed to them.”
The exchange noted that its OTC team has already converted all the funds back to their original tokens and amounts, and is now preparing to refund all affected parties. The process of transferring the funds back to the victims is expected to be completed “within the next several days”.