FatMan continues to “unmask” Mirror Protocol – the henchman of CEO Terra Do Kwon

FatMan, an anonymous analyst and commentator familiar to the Terra community, has made a new set of allegations against the Mirror aggregated asset protocol. Specifically, an attack related to the key contract of this protocol.

Since the Terra incident in early May, FatMan has exposed the inner workings of the ecosystem. Accordingly, these revelations paint a picture of suspicious things going on. The latest allegations suggest that Terra users have been treated unfairly for far longer than previously assumed.

Details shared on social media on May 26 alleging that Mirror Protocol is perhaps not as decentralized as they claim.

He tweeted a detailed investigation into Mirror’s whale wallets, which he suspects are trying to conceal their influence by spreading MIR tokens on burner wallets.

“I have found evidence that this wallet and related wallets try very hard to make it look like MIR governance is not majority-controlled by a single entity – they do so by splitting up MIR between several fresh anonymous wallets.”

One of these wallets is tied to Terraform Labs CEO Do Kwon through a Decentralized Autonomous Organization (DAO) to which he serves as an advisor.

Tying all of this together, FatManTerra suggests that senior Terra individuals may be distorting governance and benefitting as a result. He also tweeted details of an intercepted Mirror Protocol attack about 18 days ago, coinciding with the time UST lost its peg.

The bug in question relates to the Mirror lock contract. Under normal circumstances, users lock their collateral, and after a 14-day holding period, they can use an unlock function to release the collateral.

Until the UST collapsed, there was no duplicate check in the code that managed the unlock function. That is, after the 14-day lock-in period, an attacker might repeatedly release funds. Furthermore, FatManTerra claimed that Mirror Protocol corrected the flaw without notifying the Mirror community of its existence.

Further investigations show attackers have exploited the bug hundreds of times since October 2021.

Suspicions were raised further when one of the wallets implicated timed a UST dump shortly before the Terra pegging mechanism was suspended.

According to PF92, a community investigator, at least 88 million UST was taken as a result of this vulnerability.

FatManTerra concluded the tweetstorm by saying he doesn’t know who is to blame but would continue to investigate.

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Harold

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