Binance Hacker’s Sale of Obscure 2017 Token Triggers 90% Price Crash

A little-known cryptocurrency launched during the 2017 market boom plunged more than 90% early Friday after the hacker linked to Binance’s security breach sold large amounts of the token into a market with insufficient liquidity to absorb the supply.

FUNToken (FUN), previously known as FunFair, suffered a sharp decline on its Uniswap trading pool as the attacker offloaded millions of tokens. GeckoTerminal data shows FUN’s price against wrapped ether (WETH) dropped from approximately 0.0000037 WETH to 0.00000017 WETH.

The token also recorded substantial losses in dollar terms. FUN fell 68% over 24 hours across all trading venues, according to CoinGecko.

Uniswap is a decentralized exchange that allows users to swap tokens directly through liquidity pools rather than matching buy and sell orders through a traditional exchange order book.

FUN traces its origins to the 2017 cryptocurrency boom. Its developer, FunFair Technologies, raised $26 million in a token sale lasting four hours in July of that year to develop blockchain-powered online casino games. The project has since evolved into FUNToken.

The sharp decline followed selling by the attacker responsible for the Binance incident, which involved more than $6 billion in assets taken from the exchange’s hot wallets. These internet-connected wallets are used by exchanges to process withdrawals. The incident is being described as the largest cryptocurrency hack on record.

According to Arkham Intelligence, the stolen assets included major cryptocurrencies such as Tether (USDT), USD Coin (USDC), Bitcoin (BTC), Ether (ETH), TRON (TRX) and Solana (SOL). The attacker also obtained several smaller tokens, including FUN, Prom (PROM), Reserve Rights (RSR), RedStone (RED), Origin Protocol (OGN) and Gitcoin (GTC), according to Joshua Frank, co-founder and CEO of The Tie.

Tether and Circle quickly froze stolen tokens under their control, with several other issuers taking similar action. FUNToken also urged centralized exchanges to temporarily suspend FUN deposits as a precaution.

However, decentralized platforms such as Uniswap continued operating, leaving the attacker able to sell through their liquidity pools.

Binance Hacker Begins Selling FUN Tokens

At 23:28 UTC on Thursday, a wallet identified by Etherscan as “Binance Hot Wallet Exploiter 2” transferred 714.9 million FUN to a newly created address, 0x06ea…685f.

Three minutes later, the receiving wallet began selling FUN through the FUN/WETH liquidity pool on Uniswap.

The address carried out more than 150 sales over the following hours. All but one transaction used the FUN/WETH pool on Uniswap v2. The remaining sale took place on PancakeSwap, another decentralized exchange. The final recorded transaction occurred at 04:17 UTC on Friday.

Etherscan data shows that the wallet sold 134.1 million FUN in exchange for 111.5 ETH, worth approximately $250,000.

Frank had previously estimated the stolen FUN holdings at $6.23 million. Based on that valuation, the 134.1 million tokens sold were worth approximately $1.17 million on paper. The attacker therefore received only around 21% of their estimated value through the sales.

Limited Liquidity Amplifies FUN’s Price Decline

The size of the Uniswap pool played a major role in the token’s collapse. At the time of reporting, the pool contained only about $16,000 in total liquidity, divided roughly equally between FUN and WETH.

Such limited liquidity makes a token particularly vulnerable to large sell orders. Even relatively small transactions can significantly change the balance between the two assets and push the price lower.

Unlike traditional exchanges, where buyers place orders at specific prices, Uniswap pools use an automated pricing mechanism. When someone sells FUN, the tokens enter the pool while WETH is withdrawn. The resulting change in the pool’s token balance automatically adjusts the exchange rate.

With a small pool, each large sale has a much greater impact on the price.

Market participants had already highlighted the danger posed by the attacker’s holdings in smaller tokens. In a post on X, Frank compared the value of the stolen assets with each token’s reported daily trading volume.

At the time of his analysis, the hacker’s FUN holdings were valued at $6.23 million, equivalent to 252% of the token’s daily trading volume. FUN ranked first on his list, ahead of PROM.

“The hacker holds more than an entire day’s reported trading volume in FUN and PROM,” Frank wrote.

He cautioned that daily trading volume provides only a rough indication of how much selling pressure a market can withstand.

FUN Rebounds, but Hacker Still Holds Hundreds of Millions of Tokens

After the selling activity stopped, buyers returned to the market. FUN’s price in the Uniswap pool subsequently climbed 75% over the past hour.

However, the attacker’s wallet still holds approximately 580.8 million FUN, representing about 5.4% of the token’s maximum supply, according to Etherscan. Those remaining holdings could create additional selling pressure if transferred to exchanges or liquidity pools.

Other smaller tokens associated with the attacker also declined, although their losses were less severe than FUN’s.

CoinGecko data shows Reserve Rights (RSR) down 17.6% over 24 hours, while RedStone (RED) fell 17.1% and Gitcoin (GTC) lost 16.6%.

Origin Protocol (OGN), yearn.finance (YFI) and 1inch (1INCH) recorded declines ranging from 9% to 13.6%. Bitcoin and Ether fell by comparison, posting losses of 1.8% and 2.9%, respectively.

Etherscan records show that the attacker’s main wallet, 0x5227…2f8c, sold each of these tokens through dozens of transactions on Uniswap and PancakeSwap.

Frank identified FUN, PROM, RSR, RED, OGN, SOPH, ERA and GTC as the tokens he was monitoring most closely.

He said the key concern extends beyond the total value stolen, focusing instead on how much of the remaining supply can still be transferred, how quickly the attacker can sell it and whether the available liquidity in each market can absorb the transactions.

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