$2 Million Disappeared in an Instant: Hope Finance in Disarray – How to Guard Yourself Against Fraudulent Investments
Putting some of the money you’ve worked so hard to earn into the stock market can be a smart approach to both increase your wealth and protect your financial future. Regrettably, not all possibilities for financial investment are created equal. Con artists frequently target naive investors by making false promises of large profits with very little to no risk involved. These chances are, in truth, nothing more than a Ponzi scheme, and the investors end up losing all they put into the program.
The case of Hope Finance is one example of a fraud of this kind that made the news not too long ago. The company assured potential investors that they would receive substantial returns on their financial contributions, with the earnings ostensibly resulting from FX trading. Unfortunately, it turned out to be a traditional Ponzi scheme, and investors lost more than two million dollars in the blink of an eye.
How can you safeguard yourself against fraudulent investment schemes such as this one? You can protect yourself from becoming a victim of an investment scam by following these tips:
Before you put any of your money into an investment, you should always do extensive research on both the company and the chance to invest in it. Investigate the company’s past, particularly its management team and its financial performance, as well as its performance in the market. Look for warning signs, such as the filing of lawsuits or actions taken by regulatory agencies against the company.
Always Check the Investment Advisor or Broker’s Credentials It is important to check the credentials of the investment adviser or broker who is recommending the investment opportunity. Check to see that they have the appropriate licenses and are registered with the appropriate regulatory agencies.
Be Wary of Investment Opportunities that Offer High Returns with Little to No Risk Be aware of investment opportunities that promise great returns with little to no risk involved. Always keep in mind that if anything seems too good to be true, there is a strong chance that it is.
Do not give in to Pressure Techniques Con artists frequently utilize high-pressure methods to coerce investors into making hasty judgments. Never put your money into something that you are not confident in or that you do not fully comprehend.
Your Investments Should Be Diversified Across Asset Classes You should diversify your investment portfolio by investing in a variety of asset classes like real estate, equities, and bonds. This can assist lower your overall risk and protect you from the negative effects of any individual investment that is unsuccessful.
Fraud in the investment industry is a major issue that can have catastrophic repercussions for those who invest. By adhering to these guidelines, you can shield yourself and the money you’ve worked so hard to achieve from the frauds perpetrated by investment companies like Hope Finance.
In conclusion, it is essential to keep in mind that there is never an investment opportunity that is devoid of risk, and there is always the possibility of incurring a monetary loss. You may, however, decrease your risk and protect yourself from investing scams by conducting research, confirming credentials, avoiding pressure tactics, being suspicious of promises of large returns, and spreading your money across several different financial vehicles.
Hope Finance loses $2 million
The HopeFinance project was scuttled right from the start. In point of fact, an algorithmic stablecoin on the Arbitrum layer 2 was not provided by this project, which turned out to be a hoax.
The debut of Hope Finance was planned to take place on Arbitrum on February 20. The launch occurred at three in the afternoon and went off without a hitch, as stated on the project’s Twitter account. In a short amount of time, a large number of people deposited their funds onto the platform.
On the other hand, a little less than two hours after the debut, the protocol revealed on Twitter that a con artist had taken $1.8 million:
“FUCKING SCAMMER!!!! HE SCAMMED COMMUNITY FOR 2 MILLION DOLLARS”
Along with the news that was made on Twitter, there is also a photo that depicts the con artist holding up his identification card. The latter has almost certainly been altered in order to carry out a phony KYC. In the wake of the disappearance of the cash, Hope Finance issued a fresh message, this time instructing users on how to make an emergency withdrawal using the feature that was provided.
Is there a con artist working for Hope Finance?
In spite of the fact that there is still a lot of uncertainty around this situation, it would appear that we are in the presence of a rug sweater. The evidence that was produced by the business Certik suggests that the assault originates from a member of the protocol.
According to the allegations, the attacker began by utilizing a phony Router smart contract. After that, he modified the contract known as “SwapHelper” so that it uses the phony router that had been set up before. The protocol teams were responsible for carrying out this manoeuvre. The three keyholders who make up Hope’s multi-signature arrangement effectively signed the pact.
In addition to that, the value of the variable “_swapExactTokenForTokens” has been altered to point to the address of the scammer’s wallet. Consequently, in the event that a USDC loan is taken out on the protocol, the WETH that needs to be converted is sent to the TradingHelper contract in order for it to be converted into USDC. Nonetheless, as a result of the adjustments made by the adversary, the contract sent the money to the hacker’s wallet.
The perpetrator was able to make off with around 1 million USDC and 800,000 WETH during the course of the incident. On the other hand, it is not quite apparent what role the con artist played in the enterprise at this point. It should come as no surprise that the attacker transferred the money through the Tornado Cash protocol as rapidly as possible to mask his tracks.
The protocol will not take into consideration the findings of an audit in any way.
The situation that Hope Finance found itself in was, sadly, not all that unexpected. It would appear, in point of fact, that the several contracts that comprise the protocol were not even close to being flawless.
Several vulnerabilities, including two important ones, were found during the audit of Hope Finance’s contracts that was conducted and disclosed by the company Cognitos on February 7th. The contracts contained a loophole that made it possible for an attack to reenter the game.
Furthermore, according to the evidence that was disclosed by Cognitos following the attack on HopeFinance, the teams at HopeFinance ignored the results of the audit. Just 10% of the vulnerabilities that were found during the audit had been fixed after the code had gone through its subsequent four iterations after the audit.
If developers of decentralized applications (dApps) continue to disregard audit conclusions, the ecosystem will, unfortunately, be subject to even more hacks. At this time, the majority of industry professionals are of the opinion that 2023 could very well be an even more violent year for DeFi hacks than 2022.
