Solana Meme Coin Platform Pump.Fun Exploited For $1.9M, Vows To Repay Users

Author: Murtuza Merchant | May 17, 2024 11:27am

Popular Solana (CRYPTO: SOL) based meme coin platform Pump.Fun faced a scare on Thursday after a former employee exploited a vulnerability to manipulate the platform’s system.

What Happened: The incident, which saw the perpetrator siphon off roughly $1.9 million worth of SOL tokens, sent shockwaves through the platform’s user base.

“We are aware that the bonding curve contracts have been compromised and are investigating the matter,” Pump.Fun announced on Twitter amid the chaos. Trading was promptly halted, leaving users in the dark about the situation unfolding.

Exploit Explained

Fortunately, Pump.Fun released a detailed post-mortem explaining the exploit. In a nutshell, a former employee with privileged access leveraged “flash loans” from a Solana lending protocol.

These loans, essentially short-term borrowings, allowed the individual to:

Borrow SOL tokens.
Use the borrowed SOL to buy massive quantities of specific meme coins on Pump.Fun, driving their prices to 100% on the platform’s bonding curve system.
Gain access to the liquidity pool associated with those coins upon reaching 100%.
Repay the flash loans, essentially leaving Pump.Fun out of pocket for the stolen SOL.

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Swift Action And Reassurance

Thankfully, the exploit only affected roughly $1.9 million out of the platform’s total $45 million liquidity pool. Pump.Fun reacted swiftly, redeploying the contracts and resuming trading with 0% fees for the next week.

The platform also pledged to make users whole for the affected coins. Here’s how:

Coins reaching 100% during the exploit window will be listed on Raydium, a decentralized exchange, with at least the same amount of liquidity they had before the incident.
The platform will waive trading fees for the next seven days.

“We have been working with some of the most esteemed security folks in the space to not only minimize the impact of the situation, but to ensure that this will never happen in the future,” Pump.Fun assured its users, thanking them for their trust.

Stay Ahead of the Curve

As the digital asset landscape continues to evolve, staying informed is crucial.

Benzinga’s upcoming Future of Digital Assets event on Nov. 19 offers a valuable opportunity to learn from industry leaders about the latest trends and innovations in the crypto space.

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Posted In: $SOL