Decentralized finance (DeFi) asset management protocol Velvet Capital deactivated its website temporarily to prevent a phishing attempt.
Crypto community members on X reported unusual activity on Velvet Capital’s trading platform on April 23. Some users trying to connect to the front-end were prompted to approve their wallet access to the protocol.
Internal investigations led Velvet Capital to issue a cybersecurity alert, advising investors to deny all wallet connect requests from the application until further notice.
Velvet Capital deactivated the application to minimize any further losses for investors.
Velvet Capital founder Vasily Nikonov announced the website closure on Telegram:
“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.”
Nikonov advised any affected users to open a ticket on Discord and share the transaction details with the Velvet Capital team for remediation. He added:
“Rest assured that the smart contracts are not impacted and funds on Velvet are not affected, we’re investigating the front-end issue that some of the users faced this morning and will share the results asap.”
Nikonov told Cointelegraph that after investigating the issue and adding precautionary security measures, the site was re-opened, and that no users reported any loss of funds.
Blockchain investigation firms Blockaid and Scam Sniffer had confirmed the incident before Velvet Capital’s official announcement.
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