How much was lost in the Kokomo Finance hack?

The Kokomo Finance hack resulted in $4.2M in losses on March 23, 2023.

What attack technique was used in the Kokomo Finance exploit?

The Kokomo Finance exploit utilized Rugpull. Understanding this attack vector is critical for smart contract auditors and developers building secure DeFi protocols.

How can developers prevent similar smart contract attacks?

Preventing smart contract hacks requires a combination of secure coding practices, thorough security audits, and understanding common attack vectors like reentrancy, oracle manipulation, and access control flaws. Smart Contract Hacking (SCH) provides hands-on training to help developers and auditors identify and prevent vulnerabilities before deployment.

Kokomo Finance Hack

TOTAL LOST $4.2M

Medium Mar 23, 2023 Rugpull

Affected Chain 2023 Incident surface

Recovered - No recovery reported

All-Time Rank #470 By amount stolen

Auditors 1 Prior security audit

Incident Overview

Quick Summary

Kokomo Finance was rugpulled for 4,163,392 $USD. Project's social media was removed after an exit scam.

Details of the Exploit

Kokomo Finance is a Lending and Borrowing Protocol running on a layer-2 Optimism chain. $KOKO token deployer conducted malicious actions and drained 4,163,392 $USD worth of assets from various pools. 3,967,779 $USD worth 141 $WBTC was drained after the implementation of the cBTC contract was changed and 7,000 $soWBTC was siphoned out to another EOA address and then swapped to $WTBC.

All the stolen funds this way were transferred through EOA addresses. The rest 195,613 $USD worth of $ETH was drained from KOKO/WETH UniSwap pool by the deployer-related address and almost all of the amount currently stay at the drainer's original address. Project-related social media accounts were removed shortly after an incident.

Block Data Reference

Scammer addresses:

https://optimistic.etherscan.io/address/0x41be327a…b3310f

https://optimistic.etherscan.io/address/0x5a2d0e3d…0f5716

https://optimistic.etherscan.io/address/0x5c8db6ee…cf7bff

KOKO pool drainer address:

https://optimistic.etherscan.io/address/0xe06b252d…e82f8e

Malicious transactions:

https://optimistic.etherscan.io/tx/0xd751d8b9…b6f20b

https://optimistic.etherscan.io/tx/0x728b3f1d…3da67e

Incident Report

Protocol / Project Kokomo Finance

Date of Incident March 23, 2023

Attack Technique Rugpull

Classification Other

Primary Source View Post-Mortem #1 View Post-Mortem #2

Protocol Information

Protocol Type Lending

Affected Token 0x7da25bc4cfaed3f29414c6779676e53b19a356f5

Official Website koi.finance/

Protocol Twitter/X @KokomoFinance

Team Anonymous

Source Code Verified On-Chain

Market Context at Time of Hack

Token Categories

Decentralized Exchange (DEX) Token DeFi Privacy Ethereum Ecosystem AMM zkSync Era Ecosystem DWF Labs Portfolio

Protocol Links

Discord

What the Attacker Needed to Succeed

Understanding the prerequisites for this type of attack helps auditors identify protocols that are most at risk and helps developers build better defenses.

Technical Knowledge Deep understanding of rugpull and Solidity and EVM internals

Capital Required Seed capital to cover gas and initial position setup

On-Chain Access Ability to interact with smart contracts and deploy a custom exploit contract

Protocol Analysis Identification of the exploitable vulnerability in Kokomo Finance's contract logic - root cause: other

Execution Speed Precise transaction ordering and timing to exploit the vulnerability within a single atomic block

Obfuscation Plan A strategy to launder and move stolen funds - typically through mixers, cross-chain bridges, or decentralized DEX swaps to resist tracing

What Auditors Should Check

Could this have been caught in audit? Hard to catch — private key / OpSec failures are outside smart contract audit scope

Audited by Audit Report 1 — still lost $4.2M. Prior audits don't guarantee safety, especially after post-audit code changes.

If you're auditing a protocol with similar architecture to Kokomo Finance, these are the critical security checks that could have prevented this incident (March 2023).

Verify all logic paths related to Rugpull are guarded by proper access controls and input validation
Review privileged functions (owner, admin, governance) for potential abuse vectors - centralization risks should be documented and bounded with timelocks or multi-sigs

Master these auditing techniques with hands-on labs and real exploit scenarios in the Smart Contract Hacking course.

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Security Audit History

Audit Report 1 Report

Sources & References

01
Source 1 https://www.coindesk.com/tech/2023/03/27/crypto-lender-kokomos-d…
02
Source 2 https://twitter.com/CertiKAlert/status/1640118618548568069

Threat Assessment

Severity Level

MEDIUM

Attack Vector Rugpull
Root Cause Other
Year 2023

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