Velvet Capital, a DeFi asset management protocol, has temporarily deactivated its website and mobile app to prevent a major phishing attempt.
Reports from the crypto community on April 23 highlighted an unusual activity on Velvet Capital’s trading platform: active users were prompted to approve wallet access to the protocol and sign a malicious transaction.
Following internal investigations, Velvet Capital issued an alert, advising investors to deny all wallet connect requests from the application until further notice. Investors who may have inadvertently approved the fraudulent request were urged to revoke wallet access to the protocol immediately to prevent potential loss of funds.
The platform also noted it has deactivated the application to mitigate any additional losses for investors.
Velvet Capital announced this move via posts on its Telegram and X, stating,
“ATTN, don’t interact with the Velvet website. We’re closing it for maintenance and investigating the issue. We will issue a post-mortem once the issue is solved.”
About two hours after the alert was issued, the platform stated that they were collaborating with the tech team and security researchers to identify the root cause of the issue. They asked that affected users open a ticket on Discord and provide transaction details to the Velvet Capital team for resolution.
The team later provided an update via its X handle stating that as of 6:50 am UTC, no users had reported any losses and that it had identified the issue.
According to the team, the platform’s smart contracts were unaffected, and “the issue occurred on the front end.” They noted that the funds of any user who did not interact with the prompt and sign the malicious transaction are safe.
“We will be giving another update when the issue is fixed and website is safe to use,”
the team added.
Update:
No known users were impacted, if you interacted with Velvet on April 23 after 12:30am UTC and believe you were impacted – please create a ticket on Discord.
The team promptly identified the issue and, together with top security researchers, investigated the malicious…
— Velvet.Capital (@Velvet_Capital) April 23, 2024
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