Friday, January 27, 2023

DeFi Flash Loan Hacker Liquidates Defrost Finance Users, Loses $12M

defrost financeA decentralized platform for leveraged trading on the Avalanche blockchain, announced that two of its versions – Defrost v1 and Defrost v2 – are under investigation for being hacked, Investors reported losses for their Defrost Finance (MELT) and Avalanche (AVAX) tokens after the announcement that they were staking on the MetaMask wallet.

Moments after some users complained about the unusual loss of funds, Doran, a member of the defrost finance core team, confirmed that defrost v2 had suffered a sudden loan attack., At that time, the platform believed that Defrost v1 was unaffected by the attack and decided to shut down v2 pending further investigation.

Doran, a member of the core team, confirms the attack on Defrost Finance. Source: Telegram

At the time, the platform believed that Defrost v1 was not affected by the hack and decided to shut down v2 pending further investigation.,

Defrost Finance is sad to announce that our V2 has been hacked, with an attacker using the Flash Loan feature to withdraw funds.

V1 is not affected. We will be shutting down the V2 UI shortly and will investigate further with our technical team.

Updates will be posted on our official channels.

Discovered by Peckshield, a blockchain researcher The hacker manipulated the stock price of LSWUSDC, resulting in a profit of approximately $173,000 for the hacker, Upon further analysis, Peckshield’s research revealed that:

“Our analysis shows that a fake token was added as collateral and a malicious price oracle was used to eliminate current users. Losses are estimated to exceed $12 million.”

Although the company actively announced the hack, Community suspects “rag-pull” situation,

It was originally announced that Defrost v1 would not be affected by the hack, as the first version of Defrost lacked the Flash Lending feature.,

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Doran, a member of the core team, confirmed the attack on both versions of Defrost Finance. Source: Telegram

Although, The platform later identified an emergency for v1 as well.Declaring that:

“Our team is currently investigating. We ask the community to please wait for an update and avoid using V1 or V2 for now.”

Until further notice, investors are advised to stop using Defrost Finance, An internal team is investigating the situation and will contact users through official channels.

Defrost Finance has not yet responded to Cointelegraph’s request for comment.

In 2022, North Korean hackers stole over 800 billion Korean won ($620 million) worth of cryptocurrencies from decentralized finance (DeFi) platforms alone.,

A spokesperson for South Korea’s National Intelligence Service (NIS) revealed that all North Korean hacks were carried out through foreign DeFi exploits. Although, Thanks to Know Your Customer (KYC) initiativefor its short form in English), The total number of North Korean hacks has dropped significantly,

the explanation: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be construed as financial advice or investment recommendation. All investments and commercial dealings involve risk and it is the responsibility of each individual to conduct appropriate research before making any investment decision.

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Nation World News Desk
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