A decentralized finance project on the EOS blockchain has moved $2.5 million worth of user funds in what appears to have been an exit scam.
According to China-based auditing firm SlowMist, yield farming project Emerald Mine (EMD), based on the EOS blockchain, moved tokens supposedly locked in its smart contract to an account labeled “sji111111111.” The security firm warned users not to send additional funds to the smart contract associated with the project, as some of the funds were already moved to cryptocurrency exchanges.
Another China-based blockchain security firm, PeckShield, published a similar notice on the microblogging platform WeChat shortly after, warning users that some 787,000 USDT, 490,000 EOS, and other cryptoassets were moved. In total, $2.5 million in cryptocurrency were moved.
CoinDesk reports crypto exchange Changenow has said it managed to halt the sale of 15,020 EOS tokens from the alleged scam, and moved the funds to its cold storage. The exchange wrote:
Anyone who has suffered from the exit scam can turn to their local police, and if they contact us our compliance team will check the legitimacy of the request and then a return procedure will be executed.
PeckShield and SlowMist reportedly noted that users participating in DeFi yield farming should be aware of EOS contracts without a multi-signature feature, as whoever created the contract can move assets even if they are supposedly locked up. Per PeckShield, some of the moved funds are being sold on decentralized trading platforms like DeFibox.
The EOS account sji111111111 has since received numerous small transactions from users demanding the alleged scammer return their funds.
Featured image via Pixabay.