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With the continued rise in popularity of DeFi protocols, it was only a matter of time before the hackers caught on and tried to get away with it.
The recent hack suffered by Akropolis, an Ethereum-based DeFi protocol, resulted in a loss of more than 2,030,850 DAI ERC-20 tokens. According to people familiar with the talks, smart contracts in savings pools were targeted, with the Curve Y and Curve sUSD savings taking huge losses. Twitter of the Akropolis team ad:
“We recently identified an attack performed on a set of smart contracts in the ‘savings pools’ that have been double-checked. We are working with security specialists and on-chain analytics providers and aim to release a more detailed statement soon. . “
The stablecoins were liquidated by hackers, who transferred the stolen cryptocurrency to an Ethereum digital wallet. To prevent more funds from leaving the DeFi protocol, Akropolis has temporarily suspended the activity of all stablecoin pools.
At the time of writing, the team is investigating the leaks and trying to get to the bottom. Since two separate audits were conducted on the targeted savings pools before the hackers took out over 2 million tokens, the hack took Akropolis completely by surprise. Currently, the team is evaluating ways to refund lost stablecoins to Akropolis users.
The ugly that comes with the DeFi boom
The wave of DeFi hackers has been notable this year, with the decentralized finance industry taking off in 2020 like never before. DeFi hacks, which were by no means significant in 2019, have grown hand in hand with the success of the decentralized finance industry this year.
According to CipherTrace, cryptocurrency losses and laundered funds increased 30% from last year, with $ 468 million in fraudulent funds attributed to cybercrime. Of that amount, about 20% of the attacks targeted the decentralized finance sector, resulting in about $ 98 million in stolen funds.
The biggest attack recorded in 2020, targeting the cryptocurrency exchange KuCoin, led to money laundering via DeFi. Although KuCoin is listed as a centralized exchange, this hasn’t stopped criminals from successfully stealing funds. So what’s the solution here?
According to CipherTrace, performing security checks is an important step in preventing contracts from being executed without review. Commenting on the matter, US Securities and Exchange Commission Principal Director Valerie Szczepanik also said:
“If the industry takes the time to get it right and engages with regulators to help them do it, then the good things propagate upward and you will have the benefits that come with the promise of distributed ledger technology.”
Image source: Shutterstock
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