Memecoin Hack: Normie Negotiates with Hacker to Recover Stolen Funds

The team behind Base memecoin Normie (NORMIE) is currently negotiating with a hacker to recover 90% of the funds stolen due to a smart contract vulnerability, which led to a $41.7 million plunge in the token’s market cap within three hours.

Blockchain analytics firm Lookonchain was among the first to identify the exploit and the hacker’s subsequent offer through an on-chain message to Normie’s deployer address on May 26.

The Hacker’s Offer and Conditions

Following the exploit, Normie accepted the hacker’s offer to return 90% of the stolen tokens, despite the token’s price having already fallen by 96%. The agreement hinges on Normie using the stolen funds, along with $2.3 million from the team’s development wallet, to launch a new token to reimburse NORMIE holders. Additionally, the hacker requested no reprisals in a subsequent on-chain message.

The Normie team confirmed the need for a re-launch, stating it would occur after recovering their main Twitter account and securing the funds from the exploiter. However, their temporary Twitter account was also suspended shortly after these statements.

The hacker insisted on strict conditions, emphasizing that the re-launch must happen before the funds are returned. They noted that the development wallet had significantly profited during the exploit, and they had no other means to ensure the proper use of those funds.

In the wake of the hacker’s offer, X was flooded with fake Normie posts falsely announcing the relaunch of the new token, aiming to deceive people into clicking on fraudulent links. “Dinho,” an administrator of the official NORMIE Telegram group, could not confirm when token holders might recover their stolen funds, and his X account was also suspended. 

The Wider Impact on Holders and the Memecoin Market

NORMIE’s price began to fall at 3:55 am UTC on May 26, plummeting over 92% to $0.0032 within an hour, according to CoinGecko. It fell to 99.5% within two and a half hours, and despite a brief price spike to $0.019, it continued to decline to $0.0016 at the time of writing, marking a 96% fall. The market cap bottomed out at $200,000 after falling from $41.9 million but has since seen a slight recovery.

According to the team behind the blockchain scam detector tool Quick Intel, 72,000 NORMIE holders were affected by the smart contract vulnerability, initially discovered in March. One trader, in particular, lost over $1 million worth of digital assets due to the exploit. The trader had spent $1.16 million to buy 11.23 million Normie memecoins but saw his investment fall over 99% to just $150, as reported by Lookonchain on May 26.

Normie was launched during a memecoin mania on Base in March 2024, achieving a peak market cap of $130 million on April 2, according to CoinGecko. A recent investigation revealed that 91% of Base memecoins possess vulnerabilities that could expose users to significant losses. 

Resilience in the Memecoin Market

Despite the unfortunate incident with Normie, the memecoin market remains active, with traders continuing to invest in animal-themed cryptocurrencies. Frog-themed memecoin Pepe, for example, reached a new all-time high of $0.00001718 on May 27, rising over 75% in the past week.

Although memecoins lack intrinsic utility and are among the most volatile digital assets, some traders have managed to profit significantly. Two weeks ago, a Pepe trader turned $3,000 into $46 million by trading the memecoin, making an over 15,718 times return on their initial investment, buoyed by the resurgence of the GameStop saga.

Despite the risks inherent in the memecoin market, it continues to attract traders drawn by the potential for high returns. This ongoing interest highlights the volatile and speculative nature of memecoins, where significant gains and losses can occur rapidly.