WEB3
by BSCN
January 30, 2024
The attacker, reportedly funded through assets from the sanctioned crypto-mixing service Tornado Cash, targeted Abracadabra's 'Degenbox' feature.
DeFi protocol Abracadabra Finance finds itself amid a major security breach, leaving millions of dollars at stake. According to security analysts, this vulnerable protocol has been exploited to siphon off $6.5 million, as of the latest reports.
Security firms PecShield and BlockSec have sounded the alarm, describing the incident as a malicious attack of significant proportions. BlockSec has revealed that initial investigations point towards a re-entrancy attack targeting the project's smart contracts, though further analysis is imperative.
"This is a reentrancy attack. However, some assets are still at risk and projects and users need to take immediate action," cautioned BlockSec, urging a swift response to mitigate further damage.
At present, an estimated $29 million remains trapped in the affected contracts, according to BlockSec. Despite ongoing efforts to contain the breach, reports from CyversAlerts and Peckshield suggest losses of $10 million and $6.5 million respectively.
Adding intrigue to the unfolding story, reports suggest the attacker received funds from Tornado Cash, an established crypto-mixing service. An Etherscan link shared by PeckShield points to the attack's focus on Abracadabra's 'Degenbox' feature, renowned for its automated performance-enhancing strategies.
The repercussions of the exploit reverberated as the protocol’s $MIM stablecoin plunged to as low as $0.77, amplifying market turmoil.
In the wake of the breach, Abracadabra Finance has broken its silence, acknowledging the exploit's impact on select cauldrons within the Ethereum ecosystem. As per reports, the project's engineering team is on high alert, investigating the unfolding crisis to stop the loss of funds.
This project has announced plans to initiate a buyback of MIM from the market by its DAO treasury to mitigate losses and restore stability. By implementing this strategy, the protocol aims to alleviate the strain induced by the incident as well as address the fallout from MIM's depegging.
Known for its innovative DeFi lending solutions, Abracadabra Finance has been a major player in decentralized finance for many years. Its platform allows users to leverage various cryptocurrencies as collateral to access the stablecoin, Magic Internet Money.
Disclaimer
Disclaimer: The views expressed in this article do not necessarily represent the views of BSCN. The information provided in this article is for educational and entertainment purposes only and should not be construed as investment advice, or advice of any kind. BSCN assumes no responsibility for any investment decisions made based on the information provided in this article. If you believe that the article should be amended, please reach out to the BSCN team by emailing [email protected].
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