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Largest Binance Smart Chain Fraud: Meerkat Finance (MKAT) Rug Pulled with $32 Million Losses

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Thu, 03/04/2021 - 12:11
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Vladislav Sopov
Another day, another "rug pull" in DeFi corner. The team at Meerkat Finance (MKAT), BSC-based "yield farming" protocol, left with whopping $32 million in BUSD and BNB
Largest Binance Smart Chain Fraud: Meerkat Finance (MKAT) Rug Pulled with $32 Million Losses
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Today, March 4, 2021, one of the biggest scams in DeFi's entire history, Meerkat Finance (MKAT), vanished with $32 million in Binance Coin (BNB) and Binance USD (BUSD) stablecoins. Here is what we know so far.

BSC-based DeFi commits exit scam, $32 million lost

Earlier today, the Chinese crypto community reported that Meerkat Finance (MKAT), a "yield farming" protocol based on Binance Smart Chain, allegedly commited a "rug pull" (a DeFi-oriented type of exit scam). Its team announced on its Telegram channel that Meerkat Finance infrastructure was attacked and all funds were stolen.

MeerKat finance DeFi commits exit scam
Image from Telegram

A team representative added that he/she and his/her colleagues feel "desperate" because of the attack but that investors do not feel any better. According to the first rough estimations by Chinese journalist Colin Wu, the MKAT community lost almost 14 million Binance USD (BUSD) and 73,635 Binance Coins (BNB).

At press time, the Binance Coin (BNB) price is struggling to stay above $240, so the entire value of the scammers' loot surpasses $32 million. That makes this "rug pull" the largest in Binance Smart Chain history and, probably, one of the worst ever DeFi scams.

It seems that the Meerkat Finance team is responsible for this textbook example of a DeFi exit scam. The official project website is shut down and its copy is deleted from the Wayback Machine, Google Cache and similar aggregators. In addition, the project closed all social media channels and removed GitHub repositories.

What was Meerkat Finance (MKAT)?

Meerkat Finance (MKAT) was a fork of another Binance Smart Chain DeFi protocol, Alpaca Finance (ALPACA). It offered "yield farming" services in MKAT-BNB pools, staking and other tools for passive income.

According to the cached version of its Twitter account, Meerkat Finance (MKAT) launched in mainnet yesterday, on March 3, 2021, at 7:00 p.m. (UTC).

The scammed investors have already launched a Telegram channel to coordinate their efforts to get their investments back. Some of them put six-digit sums in Meerkat Finance.

The fraud victims are planning to reach out to Binance CEO Changpeng Zhao and ask him for protection. Binance Chain's customer support team has already begun its own investigation.

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About the author

Blockchain Analyst & Writer with scientific background. 6+ years in IT-analytics, 3+ years in blockchain.

Worked in independent analysis as well as in start-ups (Swap.online, Monoreto, Attic Lab etc.)