Onyx Protocol Suffers $2.1M Loss in Defi Breach, Fraction of Funds Redirected to Tornado Cash

Multiple sources have confirmed that Onyx Protocol, a decentralized finance (defi) platform, has been compromised in a security breach, resulting in a loss of $2.1 million. In the wake of this attack, a fraction of the stolen crypto assets, originally from the cross-token liquidity market, were swiftly transferred to the ether mixing service Tornado Cash.

Onyx Protocol Loses $2.1M Hack by Precision Loss Vulnerability and Flash Loan

On November 1, 2023, the blockchain analysis and security team at Peckshield exposed the suspicious transaction involving Onyx Protocol, a peer-to-peer lending and cross-token liquidity market, on social media channel X (formerly known as Twitter).

The attackers launched the assault using a “precision loss” bug along with a flash loan, successfully draining a considerable amount of ETH and ERC20 tokens from the platform. Despite this, the platform’s native currency, onyxcoin (XCN), has only seen a slight decline of 0.8% since the event, a modest decrease when compared with the significant impact on crypto assets seen in previous defi hacks.

Currently, the total value locked (TVL) in the decentralized finance project is at $557,253, marking a dramatic drop from its prior level of $2.88 million the day before the breach. Notably, a portion of the stolen funds, now converted to ethereum (ETH), made their way to the ether mixing service Tornado Cash.

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