Pump.fun Resumes Operations, Compensates Users After $1.9M Heist

Pump.fun, a well-known cryptocurrency platform, has resumed operations after discovering that approximately $1.9 million worth of SOL (12.3k SOL) was stolen by a former employee.

Here’s what exactly went down.

Revealing the Shocking Heist

The heist was orchestrated by an ex-employee who abused their privileges for financial gain. The incident began at 15:21 UTC when the former employee used their access to withdrawal authority to borrow SOL through flash loans on a Solana lending protocol. The entire amount stolen was obtained this way.

The attacker, who held various coins on the platform, manipulated market values to reach 100%. When the coin values hit zero percent, the employee exploited the bonding curve liquidity. Flash loans allowed the automatic repayment of borrowed funds using the gained liquidity.

Jumping Into Action

By 17:00 UTC, Pump.fun halted all trading to contain the situation. Despite having $45 million in total liquidity, the employee managed to steal around $1.9 million from the bonding curve contracts.

The Pump.fun team quickly relaunched the contracts, allowing trading to resume. To encourage users to return, the platform is offering fee-free trading for the next seven days.

Restoring Trust and Security

Users can now trade and generate new coins without worry. However, coins that reached 100% during the attack have their liquidity pools (LPs) in limbo and cannot be traded until new LPs are established on Raydium.

Pump.fun has promised to replenish these LPs with equal or greater liquidity than what the coins had at 15:21 UTC. Within 24 hours, the company aims to fully compensate affected users.

Pump.fun has shown its resilience and commitment to user security by fully restoring its platform’s integrity and offering compensation to affected users. The quick reopening of services and temporary cancellation of trading fees highlight the platform’s dedication to maintaining user trust and ensuring platform integrity.

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This incident serves as a reminder: even the most trusted platforms can be vulnerable. Do your research and choose a crypto exchange that prioritizes security and user protection.