Defrost Finance, the decentralized trading platform that suffered a $12 million exploit in the days leading up to Christmas, has denied allegations that it had “rugged” its users as part of an elaborate “exit scam.”
On Dec. 23, the platform announced it suffered a flash loan attack, leading to the draining of user funds from its v2 protocol. One day later, another incident saw a hacker steal the admin key for a second “much larger” attack on the v1 protocol.
It’s understood the attacker or attackers conducted the flash loan attack by adding a fake collateral token and a malicious price oracle to liquidate users.
Observers, including blockchain security firms Peckshield and CertiK, as well as asset management platform DeFiYield, have suggested based on “community intel” that members of the team may have been behind the “exit scam” — given the fact that an admin key was required to perpetrate the exploit.
However, in an exclusive statement to Cointelegraph on Dec. 28, the team behind Defrost Finance broke its silence on the accusations, stating:
“We deny the accusations that the team rugged users. A compromised key does not equate to a rugpull, as much as the episode may raise doubts among the public.”
Defrost made two key arguments to deny its involvement.
Firstly, Defrost argued that if they had planned to orchestrate a rug pull, they would’ve done it months ago when its total value locked (TVL) neared $200 million.
According to DefiLlama,…
