Binance recovers Wine Swap funds

Binance recovers Wine Swap exit scam’s proceeds

The exchange identified and contacted the scammer the day after he stole more than $345,000, forcing him to return the funds

Top crypto exchange Binance seized nearly all the funds that were stolen in a cryptocurrency exit scam.

A Binance spokesperson said on Nov. 4 that the exchange had recovered 99.9% of the funds stolen in the exit scam conducted by automated market maker Wine Swap. 

According to an announcement shared today with Modern Consensus, Wine Swap launched on the Binance Smart Chain (BSC) on Oct. 13 as an automated market maker platform. In under one hour after its launch, the developers stole over $345,000 in customer funds. The exchange warned:

“With new DeFi products emerging daily, it is difficult to verify the legitimacy of each and every project. We will continue to emphasize the importance of conducting individual due diligence and research before participating to avoid cases such as Wine Swap.”

Binance seems to be rather motivated to accelerate the adoption of its BSC smart contract-capable chain as a decentralized finance (DeFi) platform. As Modern Consensus reported in late October, the cryptocurrency exchange announced that it would finance five decentralized finance projects built on the platform.

With another six projects financed by the exchange earlier that month, the total number of projects that the firm plans to fund has reached 11. All of those projects were financed by Binance’s $100 million accelerator fund for DeFi projects that leverage its BSC blockchain.

While confirming that all scam victims were BSC users, the exchnage said it is “unable to confirm whether they are customers, and their identities (beyond the addresses they used) remain unknown to us.”

The Binance and BSC teams were alerted of the scam, followed the funds and froze them with the cooperation of two other exchanges. The scammers had already converted nearly all of the funds into stablecoins, Binance Coin (BNB), Ether (ETH) and Link (LINK).

The day following the scam, Binance identified and contacted the scammer. “Knowing that they had been caught red-handed, they were quick to cooperate in an attempt to avoid the impending consequences,” the exchange said. Binance said the recovered funds, which will be distributed to the victim addresses over the next several days. It added:

“Scams ending with the full recovery of lost funds are very rare.”

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Adrian is a newswriter based out of Pisa, Italy. He's passionate about cryptocurrency, digital rights, IT, tech and futurology and likes to think about the future in a positive way.