Unknown entity drains $11.2m in liquidity via SafeMoon deployer contract

  crypto.news 8 h

On-chain tracking alarms about unusual $11.2 million transactions linked to a modified SafeMoon deployer contract, coinciding with the project’s bankruptcy proceedings.

According to an X post published by Cyvers Alerts, an unidentified entity made changes to SafeMoon‘s deployer contract, enabling the withdrawal of substantial liquidity from multiple pools.

As of press time, the entity holds over $1.6 million in different tokens, including Wrapped BTC (wBTC), Tether (USDT), and Pepe (PEPE), with the remaining extracted liquidity transferred to Ethereum, BNB Chain, and Polygon, according to data from Etherscan.

NEWSOur system detected unusual transactions involving @safemoon.
The deployer added an address as an approveLiquidityPartner at https://t.co/ayFhE3fAgN, which then removed liquidity from various pools, transferring $11.2M to https://t.co/thIHUqF3uW on $ETH, $BNB and… pic.twitter.com/iJofry10sj

— Cyvers Alerts (@CyversAlerts) February 12, 2024

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Cyvers Alerts notes the unusual movements commenced after the entity whitelisted an external address for withdrawal purposes. It remains unclear whether these transfers are linked to the ongoing SafeMoon bankruptcy case. As of press time, SafeMoon has not made any public statements on the matter. Amid the news, SafeMoon’s SFM token plunged by over 8%, according to CoinMarketCap.

In mid-December 2023, SafeMoon initiated bankruptcy proceedings with the U.S. Bankruptcy Court in the District of Utah. The bankruptcy filing came shortly after the U.S. Securities and Exchange Commission (SEC) leveled accusations against SafeMoon and its key executives, founder Kyle Nagy, CEO John Karony, and CTO Thomas Smith, for securities law violations.

According to the SEC, the trio conducted a “massive fraudulent scheme,” allegedly manipulating SafeMoon’s market capitalization to $5.7 billion through tactics such as wash trading, deceptive marketing strategies, and misleading statements regarding liquidity lock-up timelines. While Karony and Smith have been arrested, Nagy remains at large.

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