The Chinese crypto project Lucky Star Currency conducted an exit scam, stealing over $1 million in funds from its smart contracts, according to an investigation by blockchain security firm Certik.
Lucky Star Currency operates astrology-themed non-fungible token (NFT) services including an NFT marketplace and award center. But on October 9th, the project’s deployer account abruptly drained all Binance Smart Chain funds from the affected platforms.
Over 1.6 million LSC tokens were removed from the AwardCenter contract and another 1.4 million LSC were taken from the NFTMerge contract. The stolen tokens were instantly swapped into over $1 million worth of Binance USD (BUSD) stablecoin.
The looted BUSD was sent to an account that has been accumulating funds from various sources for months, implying the scam involved multiple projects depositing stolen assets.
Certik confirmed the compromised contracts were promoted as official Lucky Star Currency platforms on Telegram and Twitter. Before the rug pull exit scam, Lucky Star Currency conducted heavy marketing to Chinese crypto communities on social media and news apps.
But as news of the theft spread, the project’s website, apps, and social channels were shut down. Victims have little recourse given the pseudonymous nature of blockchain protocols.
Lucky Star Currency targeted the Chinese retail investment market amidst surging interest in NFTs and crypto.
China has faced multiple major crypto frauds recently, including the $100 million hack of cross-chain protocol Multichain in June impacting over 340 projects.