Shortly after some users complained about the unusual loss of money, Defrost Finance core team member Doran confirmed that Defrost V2 had been hit by a flash loan attack.
Defrost Finance, a decentralized leveraged trading platform on the Avalanche blockchain, has announced that both versions – Defrost v1 and Defrost v2 – are under investigation for a hack. The announcement came after investors reported losing their stakes in Defrost Finance (MELT) and Avalanche
Tokens from MetaMask wallets.
Shortly after some users complained about the unusual loss of money, Defrost Finance core team member Doran confirmed that Defrost v2 had been hit by a flash loan attack. At the time, the platform believed that Defrost v1 was unaffected by the hack and decided to shut down v2 for further investigation.
Doran, a member of the core team, confirms the attack on Defrost Finance. Source: Telegram
At this point, the platform deemed that Defrost v1 was unaffected by the hack and decided to shut down v2 for further investigation.
Blockchain investigator PeckShield found that the hacker manipulated LSWUSDC’s stock price, earning him a profit of around $173,000. Upon further analysis, PeckShield’s investigation revealed:
“Our analysis shows that a fake security token is added and a malicious price oracle is used to liquidate current users. The loss is estimated at >$12 million.
While the company proactively announced the hack, the community suspects that this is a draw situation.
Defrost v1 was initially announced to be unaffected by the hack, as the initial version of Defrost lacked a flash loan feature.
Doran, a member of the core team, confirms the attack on both versions of Defrost Finance. Source: Telegram
However, the platform also later confirmed an emergency for v1, stating:
“Our team is currently investigating. We ask the community to wait for updates and not to use V1 or V2 at this time.
Investors are advised to stop using Defrost Finance until further notice. An internal team is currently investigating the situation and will contact users through official channels.
Defrost Finance has yet to respond to Cointelegraph’s request for comment.
See also: Raydium announces hack details and offers compensation for victims
In 2022, North Korean hackers stole more than 800 billion Korean won ($620 million) worth of crypto from decentralized finance (DeFi) platforms alone.
A spokesperson for South Korea’s National Intelligence Service (NIS) revealed that all North Korean hacks were done via foreign DeFi exploits. However, with the existing Know Your Customer (KYC) initiatives, the total number of North Korean hacks has decreased significantly.
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