Merlin DEX ‘Rugpull’ Backfires As $160K Frozen By Blockchain Security Firm

Key Points:

  • CertiK blocked $160K stolen funds from Merlin’s DEX.
  • CertiK is monitoring the movement of stolen funds and working with law enforcement to uncover pseudonymous operators.
  • CertiK has committed $2M to explore all possibilities to fight exit scams.
Smart contract auditor CertiK has recently announced that they have successfully blocked hackers from withdrawing $160,000 from Merlin, which is a zk-Sync-based decentralized exchange (DEX).
DEX Merlin and CertiK Pay 2M in Compensation

Last week, Merlin was at the center of a rogue insider “rugpull” that resulted in the loss of $1.8 million for its users. This is definitely good news for those who were affected by this unfortunate event.

CertiK updated its 257,700 Twitter followers on May 5, sharing the news of their successful $160,000 freeze of the stolen funds. In addition, they are also monitoring the movement of the stolen funds to ensure that it remains blocked.

Although the firm tried to “collaborate” with Merlin to recover the funds that were stolen from the April 25 “rugpull,” their efforts were to no avail. As a result, CertiK reached out to law enforcement in the United States and the United Kingdom to uncover the identities of the pseudonymous operators who are believed to be based in Europe. CertiK also explained, “This lack of cooperation has complicated our efforts to validate and aid victims. We focus on working with law enforcement and have submitted information to relevant US & UK agencies.”

Not only is CertiK freezing the hacked funds but also exploring all possibilities to prevent future exit scams with the $2M they’ve committed. This is indeed a bold move that will help to protect users of decentralized platforms from future losses.

It is worth noting that Merlin insiders abused the owner’s wallet privileges, which is consistent with CertiK’s initial finding that it came from a private key issue instead of an exploit. Meanwhile, Merlin claims that its back-end team carried out the rug pull, which they claim to have put a “high degree of trust in.” CertiK, on the other hand, attributed part of the blame to themselves for failing to inform users of the centralization risks properly.

While the situation could have been much worse, it is still unfortunate that many users lost their funds. However, with the actions taken by CertiK, we can all hope such incidents can be avoided.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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