Back to all stories
Reports
Incident Analysis
Safereum Exit Scam
10/23/2023
Safereum Exit Scam

Introduction

On 23 October 2023, the price of Safereum dropped approximately 92% due to an externally owned address (EOA) holding the ENS safereum.eth unlocking Safereum tokens held in a PinkLock contract which they then sold. Additionally, funds raised in the project’s SAFEPAD fairnlaunch were also transferred to safereum.eth after its conclusion resulting in approximately $1.3 million in ETH lost. This incident marks the third largest exit scam CertiK have detected in October and brings the total lost to exit scams in 2023 to $144.8 million.

The Safereum Team

The Safereum smart contract was deployed on 28th September, 23 by EOA 0xf79. The deployer was initially funded by EOA 0xD24 which holds the ENS shiaholic.eth. The wallet was initially funded through FixedFloat and ChangeNOW. We can see the individuals Telegram account, however their X account has been deleted coinciding with the Safereum exit scam.

Screenshot 2023-10-24 at 15.05.53

Whilst the X account promoted the Sefereum token as if they were a buyer, it is highly likely that the individual behind the shiaholic.eth wallet and social media accounts were behind the deployment of Safereum.

Screenshot 2023-10-24 at 15.11.50

The deployer of Safereum was directly funded by shiaholic.eth with the initial SAFEREUM tokens being minted to EOA 0x67c which holds the ENS safereum.eth. Because of this link, there is a likelihood that the individual behind shiaholic.eth is also behind safereum.eth.

Event Summary

Following the deployment of Safereum, on 02 October 22:24:47 safereum.eth locked 100 billion SAFEREUM tokens via PinkLock with an unlock time set to 22:25:00 (13 seconds).

image-20231024-120259

The tokens remained untouched until 22 October when safereum.eth unlocked the tokens and sent 4.5 billion SAFEREUM to KuCoin. 95 billion tokens were then relocked following the same process above, locked at 20:37:47 UTC with the time again set to 13 seconds.

image-20231024-120932

On 23 October Safereum had a FairLaunch for SafePad with a soft cap of 20 ETH. By the end of the 12 hour presale, Safereum had raised 755.3389161 ETH (~$1,382,894).

image-20231024-104439

safereum.eth called ‘Finalize’ and split the SafePad presale funds as follows:

  • 14.37 ETH to 0x4B0
  • 21.13 ETH to 0x498 ERC1967Proxy
  • 334.83 ETH to 0x67c (safereum.eth)
  • 348.49 ETH added to the liquidity pool

Additionally, the LP tokens were locked for one year in the Pink Lock contract meaning that the remaining funds within the SAFEPAD liquidity pool are still at risk.

Screenshot 2023-10-24 at 20.10.06

The exit scam occurred on October, 23 and impacted both the SAFEPAD and SAFEREUM tokens. Safereum.eth initially received 800 billion SAFEPAD tokens from the token deployer, with approximately 683.9 billion tokens locked in the tokes presale contract. This left safereum.eth with approximately 116 billion SAFEPAD tokens left in the wallet which were sold along with unlocked SAFEREUM tokens. Coupled with the stolen ETH that was transferred to safereum.eth the total loss amounts to 766.98 ETH (approximately $1.3 million).

image-20231024-120902

As stated above, approximately 110 WETH remains in the SAFEPAD 3 liquidity pool and which is worth approximately $197,000 at the time of writing. These funds are at risk once the LP tokens unlock.

The stolen ETH was then distributed as follows:

  • Thirteen wallets were sent 45 ETH each (585 ETH) which then bridged the funds via fixed float.
  • 0x01Ee received 3 ETH.
  • 0xa220 received 25 ETH.
  • A little under $200,000 worth of ETH was swapped for USDT and split into three wallets which then bridged the funds via fixed float.

Exit Scam Statistics in 2023

There has been a significant increase in the amount lost to exit scams in October compared to September. Not only did September see the lowest volume of incidents, it also saw the lowest amount lost. Whilst Incidents in October remain low, the losses to exit scams are roughly seven times higher. The Saferuem exit scam is the 19th largest incident in terms of USD value lost in 2023 and is the 287th incident meaning that we are likely to surpass the overall number of exit scams seen in 2022 which totalled 314 incidents.

Despite the bear market, CertiK has detected an increase in exit scams which is likely due to scam projects taking advantage of the hype around new protocols coming online such as Arbitrum and zkSync as well as scammers mimicking these protocols with fake tokens.

image-20231024-162148

Conclusion

The Safereum exit scam is the third largest that CertiK has detected in October and represents the fourth exit scam where losses have exceeded $1 million. When the Safereum marketing material was still available, the project boasted that their token was audited by five firms. This was almost certainly an attempt to gain trust amongst investors. However, this case demonstrates that smart contract audits are not enough to prevent scams from taking place. Unfortunately, exit scams are extremely common in the Web3 space and smart contract audits do not go far enough in mitigating this risk. That’s why CertiK introduced the most robust KYC process in the industry to thoroughly check the core team members, giving investors confidence in the teams behind a project.

;