Ionic Money - Rekt
Mode network's golden child just learned a $6.9 Million lesson in trust.
Ionic Money, fresh from rebranding their twice-hacked predecessor Midas, fell victim to the oldest trick in the DeFi playbook - fake collateral.
The attackers, masquerading as Lombard Finance team members, convinced Ionic to list their counterfeit LBTC token.
Within hours, the exploiters minted themselves a mountain of fake tokens, borrowed everything not nailed down, and vanished through the Tornado Cash mixer - leaving behind a trail of empty vaults and red faces.
The Mode team rushed to Twitter with their best "everything is fine" impression while Ionic stammered about "sophisticated social engineering."
In this game of digital masquerade, who's really wearing the mask - the attackers impersonating Lombard, or Ionic pretending they know what they're doing?
Deep in Mode network's backwaters, Ionic's "ongoing exploit" tweet on February 4th landed like a grenade in a chicken coop.
But before we dive into this fresh disaster, ZachXBT dropped a truth bomb that puts everything in perspective - Ionic is just Midas wearing a carnival mask.
The same Midas that got their pockets turned inside out twice in 2023 - first for $660k, then another $600k encore.
Because nothing says "trust us with your money" quite like a protocol hat-trick of catastrophe.
CertiK's front row seats revealed a performance worthy of DeFi's greatest scammer showcase.
No complex choreography needed - just deploy fake collateral, drain every vault in sight, bridge to Ethereum, and disappear through Tornado's mixer like a magic trick with extra steps.
QuillAudits traced our digital desperado's humble beginnings - 0.01 ETH and a dream.
Their masterpiece? A counterfeit LBTC token that would make even the most seasoned rugging enthusiasts slow clap in appreciation.
Lombard Finance's terse statement said it all: "An unofficial LBTC has been deployed as collateral on the Ionic Money platform on Mode network.
The on-chain breadcrumbs tell the tale.
Exploiter Address: 0x9E34d89C013Da3BF65fc02b59B6F27D710850430
Fake LBTC Contract: 0x964dd444e3192f636322229080a576077b06fba3
The attack itself played out like a speedrunner's masterpiece.
Mint 250 LBTC: 0x9aa3fd43a6b0f85b4f1bf74f0c9e79773f238591d9c6fe666287bd2c8ac19009
With their freshly minted tokens, the attacker went shopping - borrowing MBTC, uniBTC, wrsETH, WETH, STONE, etc.
Supply LBTC to Ionic (one of the transactions): 0x37e53b15cb7f298bd8c45fcbbd914ba90feb3946f5511fc55bc986b7472956df
Borrow everything not nailed down (one of the transactions): 0x5db6d90a17a44bed6d9ed9ca73d800df2661751fa1a273e71fc2174ad3b6944f
The grand finale? 1,204 ETH ($3.2M) bridged straight into Tornado Cash's welcoming arms.
Money Laundering Pipeline: 0x15Ed470607601274df6ED71172614B67001901Eb
But our thrifty thief isn't done yet - they're still sitting on 38.34 MBTC worth north of $3.7 million in loans on Move, like a dragon hoarding its crypto treasure.
Portfolio showing loans/borrows on Parsec
The team's Discord damage control hit peak comedy when one team member explained: "it was quite a sophisticated social engineering exploit. They had a legitimate oracle, a legitimate whitelisted balancer pool, and a legitimate token contract that had real bridging integrations with LBTC."
Translation: they got fooled by a well-dressed scam.
And in a moment of pure DeFi poetry, one member of their Discord asked: “What the hell is social engineering?”
Not sure you’re going to make it buddy. Surprised you made it this far.
Some call it an inside job, others blame compromised comms.
Either way, almost $7 million vanished faster than trust in centralized exchanges.
The contagion spread through Mode's ecosystem like a bad case of crypto herpes.
Our hacker's borrowed MBTC morphed into financial kryptonite, leaving Ironclad and Layerbank holding bags heavier than their hopium addiction.
"Our markets are solvent!" Ironclad screamed into the void, right before Merlin's team dropped their selective snapshot bomb.
Great news for their chosen ones - instant death for everyone else's MBTC collateral.
In DeFi's game of musical chairs, some players start with the seats already bolted to their backs.
Under the hood, this wasn't some 200 IQ exploit pulled from the depths of blockchain wizardry.
Our craft social engineers skipped Lombard's security theater entirely, turning their mint function into a personal money printer that would make Jerome Powell blush.
The scoreboard? 1,204 ETH ($3.2M) already living their best life in Tornado Cash's witness protection program, while another $3.7M sits pretty on Mode, probably waiting for its own spa day at the mixer.
Not bad for a day's work impersonating Lombard Finance.
Because in 2025's DeFi landscape, the highest APY comes from a well-crafted email signature and a Premium LinkedIn account.
When multi-million dollar protocols can be fooled by a fake email address and a counterfeit token, are we building financial infrastructure or just elaborate digital trust falls?
Social engineering - DeFi's favorite bedtime story just got another chapter.
Ionic money joins the growing list of protocols who learned that smart contracts can't patch human gullibility.
They ditched the Midas name after two exploits, but kept the same flawed recipe - trust first, verify never.
Mode network's damage control couldn't hide the bitter truth - their flagship protocol got pwned.
Meanwhile, Ironclad and Layerbank discovered that in DeFi's game of musical chairs, someone always loses their seat when the music stops.
The attackers proved once again that the weakest link in our trustless future isn't code - it's the humans deploying it.
No audit can catch a convincing LinkedIn profile, no multisig can stop a smooth-talking scammer.
Between Radiant's RAT malware and Ionic's fake Lombard, DeFi's gatekeepers are collecting social engineering war stories faster than yield.
While victims cope with empty vaults, somewhere a hacker is already practicing their next corporate signature.
Smart contracts might be trustless, but DeFi still runs on trust - so when did we start handing out VIP passes to anyone with a good story and a GitHub repo?
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