Compounder Finance Developers Allegedly Involved in $10.8 Million Rug Pull Scheme

  • The project’s funds were withdrawn via a hidden smart contract call function, which was set to activate at a fixed threshold.
  • A Telegram group of investors has started investigating the anonymous developers, hoping to reveal their identities and regain their investment.

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Yield farming platform Compounder Finance was reportedly rug pulled — developers running of with $10.8 million of investor funds — CoinDesk reported on 2 December. The assets were stolen via a hidden smart contract method that allowed the developers to withdraw all the funds from the platform.

According to the founder of Compound Finance, Robert Leshner, the thievery was initiated by the protocol’s anonymous coders; they put a threshold of around $10 million for the method in question to activate.

This threshold was apparently met this Tuesday, allowing the schemers to get hold of all assets. Supposedly, Compounder Finance was named aptly to imitate Compound Finance as a way of attracting interest, making it possible for the threshold to be reached as soon as possible.

According to CoinGecko, in the last 24 hours, the price of Compounder’s native token, CP3R, went down nearly 99%. The platform’s website has been disabled, which further indicates that the whole project was just another crypto fraud scheme.

Compounder was initially audited by Solidify Finance, which claimed to have found and reported the time-locked contract in question in mid-November. According to Solidity Finance, Compounder’s development team planned the retrieval of the funds, swapping the safe and audited contracts with the malicious ones.

A Telegram group of investors has initiated a legal process against Compounder’s development team, aiming to gather more information about the identities of the perpetrators and potentially claim back their lost funds.

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