Binance’s indecision to freeze BNB wallets drew controversy in this $11M rug pull
As it turns out, Binance does in fact have the power to freeze private wallet addresses on BNB Chain, albeit only with the consensus of all its validators….
As it turns out, Binance does in fact have the power to freeze private wallet addresses on BNB Chain, albeit only with the consensus of all its validators.
A BNB Chain rug pull scams users out of $2 million ($11 million at today's BNB prices). Users ask Binance for help. Binance says it has frozen the funds but then retracts the statement. The funds sat in the address for nearly two years when Binance suddenly took action to freeze the scammer's wallet, which had grown to $10.8 million. Previously, Binance had stated that it could not freeze wallets outside exchange addresses due to BNB Chain's decentralized nature. Users are unhappy and demand Binance to do more. This is the story of the PopcornSwap scam.
On January 28, 2021, decentralized exchange PopcornSwap on Build N Build (BNB) Chain executed an exit scam, stealing over $2 million of liquidity providers’ assets through a little known “preUpgrade” function contained in the exchange’s smart contract. Users held out hope that Binance, creator of BNB Chain, would be able to freeze the scammers’ address. The BNB held in the scammer’s account has grown to over $10 million in value since then as users speculated on whether or not the funds had been frozen.
An investigation reveals that contrary to popular belief, Binance is in fact able to freeze private wallet addresses on BNB Chain, so long as all validators consent. Although the attacker’s address was ultimately frozen by Binance, this action occurred nearly two years after the scam. In the intervening two years, the attacker voluntarily kept funds in the original account and did not move them.
The PopcornSwap rug pull
In 2021, PopcornSwap became one of the first decentralized exchanges on the newly launched Binance Smart Chain (BSC), which was later renamed “BNB Smart Chain.” Some of the network’s users flocked to PopcornSwap to deposit liquidity, hoping to profit from the high trading volumes they expected to materialize on BSC. But instead of getting the record yields they had expected, they lost all of the funds they had deposited. PopcornSwap was a fork of Pancakeswap, which was itself a fork of Sushiswap on Ethereum. And it just so happened that Sushiswap contained a “preUpgrade” function that allowed developers to approve themselves as spenders for every liquidity provider (LP) token, letting them drain all of the assets held by the protocol.
Between 1:26 p.m. and 5:53 p.m. UTC, January 28, 2021 BSC address 0xFd6042Df3D74ce9959922FeC559d7995F3933c55 used the aforementioned function to drain the protocol’s $2 million worth of crypto, swapping all of it into the network’s native coin, BNB, in the process. PopcornSwap LPs had lost everything. The attack ended at 5:53 p.m. UTC, January 28, when Fake_Phishing7 initiated a final transaction swapping 250,913 Binance-pedgged USD Coin (USDC) for 5,536 BNB. This left the scammer with approximately 48,511 BNB, worth $2 million at the time (and $10.8 million now), held in its address.
PopcornSwap funds have remain unmoved for over two years. Source: BSC Scan
Victims ask Binance for help
In the wake of the rug pull, victims formed the PopcornRugPull Telegram group. They urged one another to reach out to Binance and report the fraud, asking Binance to freeze the scammers address before any funds could be cashed out. Some users believed that Binance could freeze the scammer's private wallet address. Others argued that this was impossible, as a centralized exchange cannot freeze a private wallet address.
A Popcornswap victim urging others to report the fraud. Source: Telegram.
On January 29, 2021 Binance responded to one of the PopcornSwap victims. A user who calls themselves “Richie” posted an image of the email they received. In it, the Binance customer service agent mistakenly stated that “the wallet of the scammer has been frozen.” The customer service agent urged Richie and all PopcornSwap users to be patient “until the whole situation gets resolved by authorities.”
Caption: Binance customer support representative stating in early 2021 that the Popcornswap scammer’s address had been frozen. Source: Telegram.
But by October 2022, the stolen funds remained unmoved, and all attempts to get customer service to respond were met with form letters asking users to contact police. PopcornSwap victims were bewildered by the exchange’s seemingly callous response to users’ requests for reimbursement. However, blockchain data shows that at the time of these complaints, Binance did not have any possession of the stolen funds, nor was it affiliated with the entity that stole users' money.
Contrary to the statement from Binance’s customer service representative, data from BNB Smart Chain shows that the scammer’s address was not frozen prior to October 6, 2022. Instead, the funds remained in the attacker’s account and were never deposited to a centralized exchange nor bridged to another network. The scammer failed to cash out their stolen loot and never profited from the attack. But this failure was due to the scammer’s own lack of initiative, not due to any freezing action performed by Binance.
The October 6, 2022 freeze
On October 6, 2022, in an attack completely unrelated to the PopcornSwap scam, the BSC Token Hub bridge was exploited for over $570 million. The exploiter used a loophole within the bridge code to issue 2 million BNB on Smart Chain without first depositing them to the Beacon Chain side of the bridge. This meant that the total supply of BNB increased by 2 million on BSC.
The attacker immediately bridged $100 million worth of the exploited BNB to other networks, effectively putting the funds out of reach of BSC validators. In response, BSC developers proposed a hard fork of the network that would shut down the bridge and freeze the exploiter’s address. While drafting this proposal, the team also included a line in the code freezing the PopcornSwap scammer’s address.
This upgrade was unanimously approved by all of BNB Chain’s validators. As a result, both the bridge exploiter’s and PopcornSwap scammer’s addresses were banned from performing any outgoing transactions after October 6, 2022. However, the new proposal did not include code transferring the frozen funds to another address. Victims say that Binance could have done more to mitigate the incident.
11/ On a positive note, it's worth noting that Binance did freeze the wallet and BNB when a significant hack occurred, which is a positive step. However, the subsequent silence and lack of communication regarding the frozen BNB raise concerns. We deserve answers.
In a conversation with Cointelegraph on August 31, a representative from Binance confirmed that the October 6, 2022 proposal to freeze address 0xFd6042Df3D74ce9959922FeC559d7995F3933c55, also known as “Fake_Phishing7,” was made by Binance. The representative also confirmed that this was merely a proposal, which could not be implemented without the consent of validators. In this case, the proposal was agreed to unanimously by all network validators. They stated:
“At the request of PopcornSwap victims, Binance proposed blacklisting the attacker’s address alongside the BNB Bridge attacker in October 2022, which was submitted by the BNB Chain team and approved by network validators.”
Binance also confirmed, in agreement with blockchain data, that the funds were never moved into Binance’s possession. “We can confirm that the scammer did not transfer funds to Binance, and we don’t have control over the funds,” they stated. “BNB Chain is an open-source and decentralized ecosystem; wallets and/or their funds cannot be frozen at will [and] governance decisions are coordinated by the community.”
Binance claimed that the investigation has not been closed, and that the exchange stands ready to comply with police if it can be of assistance “This case remains under investigation, and our investigations team is always ready to support law enforcement in pursuit of those responsible,” it stated.
The Pocornswap scam: a cautionary tale
Victims of the PopcornSwap scam lost over $2 million of their hard-earned money as a result of it. Seeing that Binance was the developer of BNB Smart Chain, they turned to it for help. The exchange refused to help citing the decentralized nature of blockchains. However, Binance subsequently reversed course and froze the scammer's private address with the agreement of BNB Chain validators.
The PopcornSwap scam also serves as a cautionary tale of the risks of using smart contracts. If a smart contract contains a loophole that allows an attacker to drain users’ funds, the victims will face an uphill struggle trying to get reimbursed by validators after the attack is completed, since forks of a blockchain essentially require unanimous consent to be implemented. Such is the nature of blockchains. In addition, take note that despite their decentralized claims, entities can in fact, exercise control over users' assets if they wish.
Cointelegraph Editor Zhiyuan Sun contributed to this story.
BUFFALO, NY- March 11, 2024 – Impact Journals publishes scholarly journals in the biomedical sciences with a focus on all areas of cancer and aging research. Aging is one of the most prominent journals published by Impact Journals.
Credit: Impact Journals
BUFFALO, NY- March 11, 2024 – Impact Journals publishes scholarly journals in the biomedical sciences with a focus on all areas of cancer and aging research. Aging is one of the most prominent journals published by Impact Journals.
Impact Journals will be participating as an exhibitor at the American Association for Cancer Research (AACR) Annual Meeting 2024 from April 5-10 at the San Diego Convention Center in San Diego, California. This year, the AACR meeting theme is “Inspiring Science • Fueling Progress • Revolutionizing Care.”
Visit booth #4159 at the AACR Annual Meeting 2024 to connect with members of the Agingteam.
About Aging-US:
Agingpublishes research papers in all fields of aging research including but not limited, aging from yeast to mammals, cellular senescence, age-related diseases such as cancer and Alzheimer’s diseases and their prevention and treatment, anti-aging strategies and drug development and especially the role of signal transduction pathways such as mTOR in aging and potential approaches to modulate these signaling pathways to extend lifespan. The journal aims to promote treatment of age-related diseases by slowing down aging, validation of anti-aging drugs by treating age-related diseases, prevention of cancer by inhibiting aging. Cancer and COVID-19 are age-related diseases.
Agingis indexed and archived byPubMed/Medline (abbreviated as “Aging (Albany NY)”), PubMed Central, Web of Science: Science Citation Index Expanded (abbreviated as “Aging‐US” and listed in the Cell Biology and Geriatrics & Gerontology categories), Scopus (abbreviated as “Aging” and listed in the Cell Biology and Aging categories), Biological Abstracts, BIOSIS Previews, EMBASE, META (Chan Zuckerberg Initiative) (2018-2022), and Dimensions (Digital Science).
Please visit our website at www.Aging-US.com and connect with us:
NY Fed Finds Medium, Long-Term Inflation Expectations Jump Amid Surge In Stock Market Optimism
One month after the inflation outlook tracked by the NY Fed Consumer Survey extended their late 2023 slide, with 3Y inflation expectations in January sliding to a record low 2.4% (from 2.6% in December), even as 1 and 5Y inflation forecasts remained flat, moments ago the NY Fed reported that in February there was a sharp rebound in longer-term inflation expectations, rising to 2.7% from 2.4% at the three-year ahead horizon, and jumping to 2.9% from 2.5% at the five-year ahead horizon, while the 1Y inflation outlook was flat for the 3rd month in a row, stuck at 3.0%.
The increases in both the three-year ahead and five-year ahead measures were most pronounced for respondents with at most high school degrees (in other words, the "really smart folks" are expecting deflation soon). The survey’s measure of disagreement across respondents (the difference between the 75th and 25th percentile of inflation expectations) decreased at all horizons, while the median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—declined at the one- and three-year ahead horizons and remained unchanged at the five-year ahead horizon.
Going down the survey, we find that the median year-ahead expected price changes increased by 0.1 percentage point to 4.3% for gas; decreased by 1.8 percentage points to 6.8% for the cost of medical care (its lowest reading since September 2020); decreased by 0.1 percentage point to 5.8% for the cost of a college education; and surprisingly decreased by 0.3 percentage point for rent to 6.1% (its lowest reading since December 2020), and remained flat for food at 4.9%.
We find the rent expectations surprising because it is happening just asking rents are rising across the country.
At the same time as consumers erroneously saw sharply lower rents, median home price growth expectations remained unchanged for the fifth consecutive month at 3.0%.
Turning to the labor market, the survey found that the average perceived likelihood of voluntary and involuntary job separations increased, while the perceived likelihood of finding a job (in the event of a job loss) declined. "The mean probability of leaving one’s job voluntarily in the next 12 months also increased, by 1.8 percentage points to 19.5%."
Mean unemployment expectations - or the mean probability that the U.S. unemployment rate will be higher one year from now - decreased by 1.1 percentage points to 36.1%, the lowest reading since February 2022. Additionally, the median one-year-ahead expected earnings growth was unchanged at 2.8%, remaining slightly below its 12-month trailing average of 2.9%.
Turning to household finance, we find the following:
The median expected growth in household income remained unchanged at 3.1%. The series has been moving within a narrow range of 2.9% to 3.3% since January 2023, and remains above the February 2020 pre-pandemic level of 2.7%.
Median household spending growth expectations increased by 0.2 percentage point to 5.2%. The increase was driven by respondents with a high school degree or less.
Median year-ahead expected growth in government debt increased to 9.3% from 8.9%.
The mean perceived probability that the average interest rate on saving accounts will be higher in 12 months increased by 0.6 percentage point to 26.1%, remaining below its 12-month trailing average of 30%.
Perceptions about households’ current financial situations deteriorated somewhat with fewer respondents reporting being better off than a year ago. Year-ahead expectations also deteriorated marginally with a smaller share of respondents expecting to be better off and a slightly larger share of respondents expecting to be worse off a year from now.
The mean perceived probability that U.S. stock prices will be higher 12 months from now increased by 1.4 percentage point to 38.9%.
At the same time, perceptions and expectations about credit access turned less optimistic: "Perceptions of credit access compared to a year ago deteriorated with a larger share of respondents reporting tighter conditions and a smaller share reporting looser conditions compared to a year ago."
Also, a smaller percentage of consumers, 11.45% vs 12.14% in prior month, expect to not be able to make minimum debt payment over the next three months
Last, and perhaps most humorous, is the now traditional cognitive dissonance one observes with these polls, because at a time when long-term inflation expectations jumped, which clearly suggests that financial conditions will need to be tightened, the number of respondents expecting higher stock prices one year from today jumped to the highest since November 2021... which incidentally is just when the market topped out during the last cycle before suffering a painful bear market.
Homes listed for sale in early June sell for $7,700 more
New Zillow research suggests the spring home shopping season may see a second wave this summer if mortgage rates fall
The post Homes listed for sale in…
A Zillow analysis of 2023 home sales finds homes listed in the first two weeks of June sold for 2.3% more.
The best time to list a home for sale is a month later than it was in 2019, likely driven by mortgage rates.
The best time to list can be as early as the second half of February in San Francisco, and as late as the first half of July in New York and Philadelphia.
Spring home sellers looking to maximize their sale price may want to wait it out and list their home for sale in the first half of June. A new Zillow® analysis of 2023 sales found that homes listed in the first two weeks of June sold for 2.3% more, a $7,700 boost on a typical U.S. home.
The best time to list consistently had been early May in the years leading up to the pandemic. The shift to June suggests mortgage rates are strongly influencing demand on top of the usual seasonality that brings buyers to the market in the spring. This home-shopping season is poised to follow a similar pattern as that in 2023, with the potential for a second wave if the Federal Reserve lowers interest rates midyear or later.
The 2.3% sale price premium registered last June followed the first spring in more than 15 years with mortgage rates over 6% on a 30-year fixed-rate loan. The high rates put home buyers on the back foot, and as rates continued upward through May, they were still reassessing and less likely to bid boldly. In June, however, rates pulled back a little from 6.79% to 6.67%, which likely presented an opportunity for determined buyers heading into summer. More buyers understood their market position and could afford to transact, boosting competition and sale prices.
The old logic was that sellers could earn a premium by listing in late spring, when search activity hit its peak. Now, with persistently low inventory, mortgage rate fluctuations make their own seasonality. First-time home buyers who are on the edge of qualifying for a home loan may dip in and out of the market, depending on what’s happening with rates. It is almost certain the Federal Reserve will push back any interest-rate cuts to mid-2024 at the earliest. If mortgage rates follow, that could bring another surge of buyers later this year.
Mortgage rates have been impacting affordability and sale prices since they began rising rapidly two years ago. In 2022, sellers nationwide saw the highest sale premium when they listed their home in late March, right before rates barreled past 5% and continued climbing.
Zillow’s research finds the best time to list can vary widely by metropolitan area. In 2023, it was as early as the second half of February in San Francisco, and as late as the first half of July in New York. Thirty of the top 35 largest metro areas saw for-sale listings command the highest sale prices between May and early July last year.
Zillow also found a wide range in the sale price premiums associated with homes listed during those peak periods. At the hottest time of the year in San Jose, homes sold for 5.5% more, a $88,000 boost on a typical home. Meanwhile, homes in San Antonio sold for 1.9% more during that same time period.
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