BNB Chain LaunchZone decentralized protocol loses $700,000 as attackers drain protocol liquidity using the PancakeSwap decentralized exchange around 7:32 UTC on February 27, 2023.
The LaunchZone team later paused trading its native token, LZ, which has since dropped 83% to around $0.000086.
BNB Chain DEX PancakeSwap shows spike in LZ/BUSD trading volume
Following the announcement, Biswap, a decentralized exchange on the BNB network, said it would delist the token within five hours.
LZ is a LaunchZone ecosystem utility and governance token that complies with the BEP-20 token pattern. The token has a total supply of 50,000,000. According to Coingecko, it is mainly traded on PancakeSwap, another BNB DEX.
Currently, the LZ/BUSD trading pair on the PancakeSwap DEX has the highest liquidity. Its transaction volume increased by over 7,000% in the past 24 hours to over $700,000, suggesting it may have been used in exploitation.
Analytics firm Chainalysis recently reported that DeFi exploiters stole over $3 billion in 2022, accounting for 82% of all crypto attacks. Exploits targeted smart contracts that users used to transfer cryptocurrencies from one blockchain to another, called bridges.
Halborn’s COO, a DeFi smart contract auditor, said many DeFi protocols suffer attacks because they don’t invest enough in security guys.
“A large protocol should have 10 to 15 people on the security team, each with a specific area of expertise,” he told Chainalysis in the company’s 2022 crypto hacking report. “The DeFi community is generally not demanding better security – they want to go for protocols with high throughputs. But these incentives lead to problems down the road.”
Earlier this month, quantitative trading firm Jump Crypto found a security flaw in Binance’s BNB Chain that would have allowed the minting of an unlimited number of BNB tokens from the exchange. The BNB Chain team supposedly fixed the issue within 24 hours.
Texas Regulators Block Binance.US Acquisition of Voyager Assets
in another binance news, Texas regulators filed court papers last week to block Binance.US’ acquisition of the assets of bankrupt cryptocurrency exchange Voyager Digital.
In a joint filing with the New Jersey Bureau of Securities on February 24, 2023, Texas regulators said that despite the Binance deal having significant support from Voyager’s unsecured creditors, the creditors were not informed of the repayment claim. of $446 million from Alameda, which could reduce other creditors’ claims from 51% to 25%.
The US Securities and Exchange Commission recently filed court documents alleging that Binance.US potentially faces commercial risks from regulatory actions making the transfer of Voyager customer assets to Binance.US unsustainable.
An American judge in the bankruptcy court for the Southern District of New York has approved the acquisition of Voyager assets by Binance.US for US$1.02 billion in January 2023.
Voyager Digital filed for bankruptcy in July 2022 after bankrupt hedge fund Three Arrows Capital defaulted on a $654 million loan.
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BeInCrypto has reached out to the company or individual involved in the story for an official statement on the recent developments, but has yet to hear back.