Bitfinex’s LEO token, the ERC20 token issued by the subsidiary Unus Sed Leo, reportedly has deliberate flaws that allow the token to operate multi-billion dollar fraud according to the Cointelligence research firm.
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Let’s find out more in the altcoin news below.
According to the research company’s report, Bitfinex may have created a smart contract for the LEO ERC20 token deliberately that enables opening the floodgates to massive fraud. Bitfinex’s LEO token and its potential owner cannot print or mine the unlimited amount of new tokens but they can delete anyone’s coins including to the ones that are on the centralized or decentralized exchange or in the hot or cold storage, software, hardware or paper wallet. The LEO token which was launched back on May 10th allows the entity behind it to have unlimited control over the coin which could leave more room for a multi-billion dollar fraud.
Cointelligence explains the code parts that show how the token can be manipulated by the owner in every way possible. The controller contract allows the entity behind the token to issue, approve, transfer and change the controller itself. Also, the address that controls the LEO ERC20 smart contract can also be effortlessly upgraded to any address. Once the controller is changed, the owner can mine tokens further without ending or deleting anyone’s tokens in a matter of seconds. This can be achieved via the code functions like ‘’generateTokens’’ or ‘’DestroyTokens.’’
Cointelligence also simulated some of these actions by mirroring the LEO code on Ethereum. They discovered that the tokens can be minted and deleted easily by the owner at any point. Biftinex CEO Paolo Ardoino explained on Twitter:
‘’For security and future proof reasons we left the ability also to upgrade the Token Contract. That’s really a key feature for a contract that might live lot of years. Minting more tokens would just not make sense for Finex… like shooting our foot.’’
In the latest cryptocurrency news, Twitter users argued that EOS and TRON are the few examples of entities that could do the same with their tokens but nobody seems to be talking about it.
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