Swaprum DEX, a decentralized exchange operating on the Ethereum Layer 2 network known as Arbitrum, has been implicated in an exit scam that resulted in the disappearance of approximately $3 million in user deposits. The team behind Swaprum executed a deliberate withdrawal of liquidity, leading to a significant devaluation of their native token and rendering investors’ holdings nearly worthless. In an attempt to obfuscate the illicitly obtained funds, the stolen assets were laundered through the popular Ethereum mixer service, Tornado Cash. Furthermore, Swaprum swiftly deleted its social media presence, leaving investors and authorities without a means of contact.
Uncovered Backdoor Functionality and Unauthorized Asset Control
Upon closer examination by security analysts at Beosin, a hidden backdoor functionality was discovered within Swaprum’s smart contract. This backdoor allowed the perpetrators to stealthily steal LP tokens staked by users and remove liquidity from the pool for personal gain. Such malicious actions provided the scammers with unauthorized control over users’ assets.
Joining the Rising Trend of Exit Scams in Ethereum Layer 2 Ecosystem
This incident adds to the growing trend of exit scams within the Ethereum Layer 2 ecosystem, as another decentralized exchange, Merlin, vanished just last month with nearly $2 million in a similar manner. These scams highlight the importance of due diligence and caution when participating in the cryptocurrency space, emphasizing the need for robust security measures and regulatory oversight to protect investors from fraudulent activities.