The developer was later released on bail

UK authorities have arrested former Pump fun employee for a $1,9 million platform hack

20.05.2024 - 14:20

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3 min

What’s new? The UK police have arrested Jarrett Dunn, a former employee of the meme token launch platform Pump fun on the Solana network, for an exploit that caused $1,9 million worth of damage to the project. On May 16, the developer, also known under the nickname STACCoverflow, himself admitted to committing the hack, later confirmed by the Pump fun team.

Material by Cryptoslate

What else is known? Pump fun said that the former employee abused his position to withdraw funds and exploit the platform’s systems. The attack was carried out using the instant loan/flash lending method. Dunn used the Raydium protocol to borrow Solana’s (SOL) native tokens and then procure as many tokens as possible on Pump fun, access their liquidity, and repay the loan.

Within a decentralized financial system, the flash loan feature allows assets to be borrowed without collateral, subject to repayment within a single block of transactions. However, the vulnerabilities of this mechanism allow market prices to be manipulated. For example, by borrowing large amounts of funds, an attacker can artificially create market conditions that allow him to capitalize on price discrepancies before the loan is repaid.

In this way, the former employee of the platform managed to steal 12 300 SOL worth $1,9 million. After the attack, Pump fun briefly suspended operations and then began paying compensation.

In his X-account, Dunn said Pump fun accused him of stealing $2 million and attempting to steal $80 million, which is the total value locked (TVL) of the project. He urged users to withdraw funds from the platform and revealed that Baton Corp. was behind it.

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Police tracked Dunn through social media and released him on bail after his arrest. He is scheduled to re-appear at the station on August 16.

Earlier this month, the developer of the Solana-based Cypher protocol admitted to gambling some of the project’s funds. He took $300 000 from Cypher’s cryptocurrency hacking reimbursement fund. The loss was discovered when some users failed to receive compensation after an exploit last August.

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