Share this article
Crypto Lender Kokomo's Developers Used Wrapped Bitcoin for $4M ‘Exit Scam,’ Security Firm Says
Kokomo's tokens fell 97%, and the project deleted its presence on social media.
Updated Mar 27, 2023, 7:35 p.m. Published Mar 27, 2023, 7:20 a.m.
Make us preferred on Google
Developers behind the Optimism-based lending platform Kokomo Finance seemed to have conducted an exit scam over the weekend after manipulating tokens on the protocol to effectively steal $4 million in user funds.
An exit scam is said to occur when developers or promoters of a crypto project seem to market a legitimate-looking project to investors, only to pull liquidity and erase their online or offline presence once a sizable amount of money has been attracted to that project.
STORY CONTINUES BELOW
Launched on Saturday, Kokomo Finance allowed users to trade, borrow and lend wrapped bitcoin (WBTC), ether (ETH), tether , USD coin (USDC) and . It quickly gained favor among Optimism users.
On Sunday night, Kokomo developers deployed an attack contract cBTC from the main address of KOKO, Kokomo’s native tokens. They then set the reward speed, paused a borrow feature and created a malicious contract to interact with the rest of the protocol, security firm CertiK said.
#CertiKSkynetAlert 🚨
— CertiK Alert (@CertiKAlert) March 26, 2023
On 26 March 2023, Kokomo Finance conducted an exit scam and stole ~$4 million in user funds.
Details Below 👇 https://t.co/BEPwfahblz
cBTC is a wrapped bitcoin derivative issued on the Ethereum network. The issuance of the token was ultimately used to trick the protocol into falsely believing it had more liquidity when there was none.
Another developer address was then used to maliciously approve a transfer of spending more than 7,000 sonne wrapped bitcoins, another bitcoin derivative token on Ethereum. Those tokens were then used to swap all user-supplied liquidity to Kokomo, amounting to over $4 million.
Social-media accounts and the Kokomo website were quickly deleted in the following and were inaccessible during Asian morning hours.
Meanwhile, KOKO tokens fell 97%, wiping nearly all value for holders.
The exit scam was the latest in line of a number of growing attacks and exploits in the crypto market. Earlier this month, Euler Finance, another lending platform, was exploited for $200 million.
More For You
KuCoin captured a record share of centralised exchange volume in 2025, with more than $1.25tn traded as its volumes grew faster than the wider crypto market.
What to know:
- KuCoin recorded over $1.25 trillion in total trading volume in 2025, equivalent to an average of roughly $114 billion per month, marking its strongest year on record.
- This performance translated into an all-time high share of centralised exchange volume, as KuCoin’s activity expanded faster than aggregate CEX volumes, which slowed during periods of lower market volatility.
- Spot and derivatives volumes were evenly split, each exceeding $500 billion for the year, signalling broad-based usage rather than reliance on a single product line.
- Altcoins accounted for the majority of trading activity, reinforcing KuCoin’s role as a primary liquidity venue beyond BTC and ETH at a time when majors saw more muted turnover.
- Even as overall crypto volumes softened mid-year, KuCoin maintained elevated baseline activity, indicating structurally higher user engagement rather than short-lived volume spikes.
More For You
Solana’s new phase is ‘much more about finance,’ says Backpack CEO Armani Ferrante
The Solana ecosystem has spent the past year doubling down on a financial infrastructure, Backpack CEO Armani Ferrante told CoinDesk.
What to know:
- Solana’s latest phase looks a lot less flashy than its memecoin-fueled highs, and that may be the goal.
- Armani Ferrante, CEO of crypto exchange Backpack, told CoinDesk in an interview the Solana ecosystem has spent the past year doubling down on a more sober focus: financial infrastructure. A
- fter years of experimentation as the wider crypto industry focused on NFTs, games and social tokens, attention is now shifting back toward decentralized finance, trading and payments.
Top Stories
