Assure DeFi breaks down Atom Protocol Rug Pull Step By Step

Saif Naqvi
Atom Protocol
Source: Pixabay

Assure DeFi has responded to the grievances of users whose funds were stolen concerning the Atom Protocol rug pull fiasco.

The firm, which was responsible for providing a KYC certificate to Atom Protocol, has released an investigate intelligence report about the rug pull. The 9-page document contained a background of Atom Protocol, the number of funds stolen, where they were transferred, and what measures will be taken to avoid such unethical maneuvers.

The document detailed “Atom Protocol was promised to be a high-yield node protocol with an extensive roadmap filled with items such as NFT’s, P2E, DaaS & the creation of a DAO. Within 1 day of their launch, the project owners changed the token contract to disable investor’s ability to sell their tokens & then drained the value out of the liquidity pool.

A timeline of the rug pull showed that the project launched at 10:12:58 PM UTC on 19 February. A total of 42 Billion Atom Protocol tokens (ATP) were created and the liquidity was added to the Trader Joe DEX on the Avalanche network. At around 6.00 AM on 20 February, the token’s contract was changed to disable all sell functions. The responsible party then minted 4.2 Billion ATM tokens and extracted 87440 DAI through swaps. The DAI was then swapped for 1,068.527 AVAX tokens.

The party was able to scramble the trail of funds on the Avalanche network using Tornado Cash. However, Assure DeFi was able to track large transactions sizes and identified that the stolen funds were transferred to the address 0x160c3e643f167af68956d1f8ea9af0e69e9ecab0

Furthermore, a portion of the funds was withdrawn to Binance, while the rest remained within the abovementioned wallet. All in all, a total of $87,440 were estimated to have been stolen and over 1000 victims were affected by the rug pull.

Binance Help Requested

Assure DeFi has detailed the fraud to Binance Support and requested to freeze the account to which the funds were withdrawn. However, Binance was yet to formally acknowledge or respond to the request. Additionally, affected users were encouraged to lodge their requests with the Europol CyberCrime and the French Financial Authority.

As per research firm Chainalysis, rug pulls cams accounted for nearly $3 Billion in 2021. Projects such as Atom Protocol have also found ways to bypass KYC norms and since a complete regulation framework has not been established, individuals must perform thorough research.

Twitter user @Jirayia suggested a checklist that one can follow before investing in a relatively new project.