Crypto Hack Report This Week: Analyzing Recent DeFi Hacks and Security Breaches

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The last week saw a bunch of high-profile cyberattacks on giant players in the cryptocurrency industry with a particular focus on DeFi platforms, crypto-hedge funds and other blockchain-based services. 

Join us in this week’s crypto hack report focusing on types of attacks, their methods of implementation, and the evaluation of response actions before and after the lifecycle of those attacks.

1. Sonne Finance’s million Flashlash loan attack

Sonne Finance, a typical lending/borrowing platform, was built on Compound and deployed on Optimism, a Layer-2 chain. However, there came a flash loan attack which affected their protocol. 

Attackers took advantage of the bugs in the protocol and bypassed the flash loan function to drain more than $20 million in several seconds. Through these loans, the hackers managed to manipulate the liquidity pools of the protocol and hence created massive financial harm which could only be stopped after it was detected.

Sonne Finance in cooperation with its White Hat hacker community and Blockchain security experts is on the way to tracing the stolen funds and solving the mistakes that were exploited.

2. BlockTower Capital: Partial Funding Drain

Blocktower Capital, one of the big players in crypto financial investment managing worth about $1.7  billion in assets were victim to a massive breach in their security system. 

A major setback was the loss and half drain of its main hedge fund through the action of fraudsters. The exact quantity of funds of the scam is concealed, nevertheless, the fraud surely has forced the firm to look towards engaging Blockchain forensic analysts for further investigation.  

3. ALEX Lab: $4.3 million loss to weaknesses in private key storage

ALEX lab, a DeFi bitcoin application, lost $4.3 Million of tokens. The assault specifically attacked the bridge service of BTC and consumed $300,000 k worth of Bitcoin,  $3.3 million in stablecoins and $75,000 in Sugar Kingdom (SKO) tokens.

After the detected breach, ALEX Lab is cooperating with experts to make it through its implementations and changes to its key management systems.  

4. Predy Finance: $464,000 contract vulnerability exploit

Predy Finance, the DEX on the Aribtrum chain, has been attacked due to its contract flaw – resulting in the breach of $464,000  from their lending pool. 

The hackers discovered a vulnerability in the Predy Finance smart contracts allowing them to steal considerable values leaving the system and the authorities to that problem. They knew what to do only when the issue was detected and by that time the assets had been drained already.

Predy Finance had stopped operations to identify and resolve the contract issues and the losses caused by those security flaws. To identify and fix the flaws of the smart contract they coordinated with blockchain security auditors and their collaboration for successful smart contracting.  

5. Pump. fun: $2 million misappropriation from a previous employee

There was a massive SOL token compromise in Pump.fun when a former platform employee stole more than $2 million worth of digital assets. The employee had benefited from the prominent role that granted them unrestricted access to the vault’s custody. 

This exploit utilised flash loans on Solana lending protocol to take the borrowing of SOL, trade them for different coins to cause their values on bonding curves to go up to 100%, and then sell the coins to get the liquidity that they use to repay the flash loans.

Pump. cheap resumed by its zero-fee trading for the immediate next seven days to repair the trust of the users. The site has underscored its commitment to loading seeding liquidity pools on Raydium for the impacted coins and providing consumers with assets back. 

Indeed, the events that unfolded during the past seven days have once more brought the multi-faced and dynamic nature of cyber risks leading to the crypto sphere to the forefront. 

The spectrum of illustrious flash loan exploits to the intruder threat and contract vulnerabilities revealed the significance of constant improvement in security practices, active monitoring and critical auditing actions for the ultimate object of asset protection.

Also Check Out: Crypto Hack Report Q1 2024: Trends, Losses, and Recovery Efforts