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Fake token copies Ethena Labs, gets exploited for $290K on Binance Launchpool

An abstract representation of Ethena Labs, a yield-farming protocol linked to Ethereum.

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A fake token mimicking Ethena Labs’s ENA token was exploited for 480 BNB tokens worth approximately $290,000. This incident occurred on the Binance Launchpool just hours after the real ENA token was listed for yield farming.

On-chain security firm PeckShield initially reported the incident on March 29, mistaking the fake token for the legitimate ENA token. Ethena Labs, the decentralized finance (DeFi) protocol behind the $1.3 billion USDe “synthetic dollar,” had announced the listing of its ENA governance token on the Binance Launchpool earlier that day. The vulnerability behind the exploit remains unknown, causing widespread confusion among investors.

While relatively small compared to other recent crypto hacks, the exploit highlights the ongoing issue of security vulnerabilities in the industry. According to blockchain security firm ImmuneFi, over $200 million worth of crypto was lost in 2024 alone, most of which were attributed to hacks and rug pulls across 32 separate incidents leading up to February 29. This statistic represents a 15.4% increase compared to the same period in 2023.

On the contrary, blockchain analytics firm Chainalysis claims in its 2024 Crypto Crime Report that there was a significant decline in hacks related to decentralized finance. Between 2022 ($3.7 billion) and 2023 ($1.7 billion), a decrease of 54.3% in terms of funds stolen was recorded. Despite the value going down, the rate of incidents grew from 219 to 231 over the same period.

The airdrop which Ethena Labs announced this week involves 750 million ENA tokens representing 5% of its total supply. USDe, a governance token issued by Ethena Labs, is considered in the industry as one of the first truly “synthetic” dollar tokens. It’s value quickly rose from $85 million on launch to roughly $1.3 billion at the time of writing.

This token offers a stable yield ratio for investors by making use of ether liquid staking tokens such as Lido Finance’s stETH as backing assets. With this yield farming process, the backing tokens are paired to an equal value of short ETH perpetual futures position. This is process is executed on derivatives exchanges to maintain a “rough target” close to the $1 value.

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