This Altcoin Has Been Hacked: Millions Stolen, Price Crashes!

DFX Finance (DFX), a decentralized finance (DeFi) protocol, came to the fore with a hacking attack. In the attack, 4.3 million dollars were stolen. In addition, the platform’s altcoin project suffered a decline. Here are the details…

DFX Finance hacked

DFX Finance, the protocol that provides a decentralized exchange service for fiat-pegged stablecoins, reported that it has been hacked. According to security researchers’ assumptions, an anonymous attacker first stole $7.5 million from DFX. DFX Finance group acknowledged the vulnerability. He said he paused all his smart contracts to contain the problem. He explained that they were aware of the attack within 20-30 minutes.

The incident appears to have taken place with a flash loan attack that allowed the hacker to withdraw money from DFX. Flash credit is largely a feature where cryptocurrency can be borrowed unsecured, but only if these funds are returned in a one-to-one process. From the middle of the stolen assets, the hacker transferred 2,963 ETH ($3.8 million) and about $500,000 in stablecoins. In other words, he transferred $4.3 million in assets to his wallet.

Altcoin price crashes

The attacker borrowed stablecoins from DFX Finance during the raid. It subsequently deposited them back into DFX’s liquidity pools with a “callback function” that bypassed flash credit checks. With the attack, DFX’s liquidity pool tokens were disposed of via multiple flash credits. Flash loans are intended for arbitrage trading and increasing capital efficiency. However, hackers must have misused them regularly to exploit vulnerabilities.

Meanwhile, DFX Finance’s DFX token fell 32.4 percent to $0.17. The cryptocurrency was changing hands at $0.29 before the hack news. It fell as low as $0.155 on a daily basis. It is now trading at $0.173.

Meanwhile, As we reported, DFX Finance raised $5 million in a funding type led by Polychain Capital and True Ventures. DFX Finance is a crypto FX trading protocol. It is essentially a DeFi protocol for FX trading. The company’s backers include Polychain Capital and Hex Capital.

DeFi attacks are increasing

DeFi attacks continue to pile up as we enter the last month of 2022. This year, the cost lost in attacks exceeded 3 billion dollars. Amid the attackers, this year’s “popular election” stands as cross-chain bridges. A total of $2 billion was lost in attacks on these bridges this year. Blockchain analytics firm Chainalysis has pointed to a 60 percent increase in crypto attacks. He reported that this increase is mostly related to the field of DeFi. The firm has also observed that the activity of crypto “mixers” has reached an all-time high.

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