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RocketSwap Hacker Launches Memecoin LoveRCKT — Price Triples in 24 Hours

Published August 16, 2023 2:50 PM
Teuta Franjkovic
Published August 16, 2023 2:50 PM
Key Takeaways
  • A hacker on RocketSwap made away with approximately 471 ETH
  • Attackers use flaws to carry out complex asset theft and memecoin schemes
  • Repeated security lapses on the Base network highlight the need to tighten security measures

Recently, there was a hacking incident at Base network’s decentralized exchange, RocketSwap, and the hacker then created the LoveRCKT  memecoin. The attacker also took RCKT tokens worth $870,00 and exchanged them for Ethereum.

RocketSwap’s security procedures, in particular its deployment procedure and private key storage, have come under scrutiny as a result of the security incident.

PeckShield, a security company, carefully investigated the breach  and found various security flaws that might have been responsible for the attack.

The launch of the memecoin was intended to profit from stolen goods, maybe by manipulating market sentiment.

This breach raised questions about RocketSwap’s security procedures, particularly regarding the deployment procedures and the storing of private keys. It discovered flaws such as offline signatures used during launchpad deployment and server-side storing of private keys.

Breaches Cause Base to Become More Alert.

Following the breach, rumors  about the RocketSwap team taking part in a “rug pull” started circulating in the cryptocurrency world. The team, however, vehemently denied any inside involvement, blaming the incident to an outside hacker who took advantage of the noted vulnerabilities.

The team revealed that the hacker used a brute force attack on a cloud server connected to the project. The private keys of RocketSwap were then accessed without authorization. These keys were used to move the assets from the yield farm of the platform.

The Base network has experienced similar incidents before. On July 31, LeetSwap, another decentralized exchange operating on the same network, suffered a similar attack  and lost $630,000.

The community became concerned about the Base network’s security and related decentralized applications due to these repeated breaches. The mainnet activation for developers only was followed by a public launch for the network.

These hacks highlight the necessity for strict security to protect user assets despite Ethereum’s $200 million inflow and rapid expansion.

400 ETH of liquidity were coupled with this recently created token on Uniswap. Traders flocked in despite the hacker’s deployment. In just one day, the cost of LoveRCKT quadrupled, going from $0.00000001 to $0.00000003, before falling by more than 90%.

Meme coins such as LoveRCKT are very valuable for scam ventures and pump-and-dump scams because to their speculative character. The hazards related to meme cryptocurrencies are further made worse by regulatory concerns.

How Do Meme Coin Scams Work?

Meme currency frauds have increased significantly in recent months. For instance, near the end of April 2023, renowned scam detective ZachXBT uncovered a user whose crypto wallet address, 0x739c58807B99Cb274f6FD96B10194202b8EEfB47, was connected to 114 meme coin scams that were produced over the course of 1.5 months.

Pump-and-dump operations are arguably one of the most prevalent scams in the ecosystem of meme coins. They involve a coordinated effort by a group of investors to boost the price of a cryptocurrency by creating favorable online buzz and enticing other people to invest in it.

This is the typical pump-and-dump scheme for a coin:

pump and dump graph
Credit: ICOHolder

And this is how the LoveRCKT price looked like:

LoveRCKT price graph
Credit: CoinMarketCap

The orchestrators sell all of their holdings once the token hits a specific price peak, which causes the price to crash and causes everyone else to lose money.

Coinbase Introduces ‘Pessimism’: Elevating Security Measures

Coinbase conveyed to CCN its belief in providing customers with access to information, tools, and expertise to empower them in making informed decisions prior to executing transactions.

Coinbase’s dedication to enhancing the security of the Ethereum ecosystem is evident through the introduction of an open-source monitoring tool known as Pessimism.

In accordance with Coinbase’s spokesperson, Pessimism is meticulously designed to promptly detect any deviations within the protocol and network, thereby bolstering the overall security of the system. Furthermore, the company is deeply involved in developing tools that empower developers to amplify their assurance in the security of the smart contracts they implement.

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