BNB Protocol LaunchZone Pauses Trading After $700,000 Hack

Published on:

BNB Chain decentralized protocol LaunchZone loses $700,000 as attackers drain liquidity from the protocol using the PancakeSwap decentralized exchange at about 7:32 a.m. UTC on Feb. 27, 2023.

The LaunchZone team later paused trading of its native token, LZ, which has since fallen 83% to about $0.000086.

BNB Chain DEX PancakeSwap Shows Spike in Trading Volume of LZ/BUSD Pair

Following the announcement, Biswap, a decentralized exchange on the BNB chain, said it would delist the token in five hours.

LZ is a governance and utility token of the LaunchZone ecosystem that conforms with the BEP-20 token standard. The token has a total supply of 50,000,000. According to Coingecko, it is traded mostly on PancakeSwap, another BNB DEX.

Currently, the LZ/BUSD trading pair on PancakeSwap DEX has the highest liquidity. It’s transaction volume was up over 7,000% in the last 24 hours to over $700,000, suggesting that it may have been used in the exploit.

LZ/BUSD Daily Trading Volume | Source: PancakeSwap

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.

The COO of Halborn, a DeFi smart contract auditor, said that many DeFi protocols suffer attacks because they don’t invest enough in security personnel.

“A big protocol should have 10 to 15 people on the security team, each with a specific area of expertise,” he told Chainalysis in the firm’s 2022 crypto hacking report. “The DeFi community generally isn’t demanding better security — they want to go to protocols with high yields. But those incentives lead to trouble down the road.” 

Earlier this month, quant trading firm Jump Crypto found a security flaw in Binance’s BNB Chain that would have allowed the minting of an unlimited number of the exchange’s BNB tokens. The BNB Chain team reportedly resolved the issue within 24 hours.

Texas Regulators Block Binance.US Acquisition of Voyager Assets

In other Binance news, Texas regulators filed court papers last week to block Binance.US’s acquisition of the assets of bankrupt crypto broker Voyager Digital. 

In a joint filing with the New Jersey Bureau of Securities on Feb. 24, 2023, Texas regulators said that, despite the Binance deal having significant support from Voyager’s unsecured creditors, the creditors were not made aware of Alameda’s $446 million clawback claim, which could reduce the claims of other creditors from 51% to 25%.

The U.S. Securities and Exchange Commission recently filed court papers alleging that Binance.US potentially faces business risks from regulatory actions, making transferring of customer assets from Voyager to Binance.US untenable.

A U.S. judge of the Southern District of New York bankruptcy court approved Binance.US’s acquisition of Voyager’s assets for $1.02 billion in Jan. 2023. 

Voyager Digital filed for bankruptcy in July 2022 after bankrupt hedge fund Three Arrows Capital failed to repay a $654 million loan. 

For Be[In]Crypto’s latest Bitcoin (BTC) analysis, click here.




BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.

Source link