Hacker of DeFi flash loan liquidates Defrost Finance users, losing $12 million
Both of Defrost Finance’s versions, Defrost v1 and Defrost v2, a decentralised leveraged trading platform on the Avalanche blockchain, have been reported as being under investigation for a hack. Investors reported losing their stakes in Defrost Finance (MELT) and Avalanche before the announcement was made.
The platform chose to shut down Defrost v2 while it conducted additional research because it first thought Defrost v1 had not been affected by the breach.
Doran, a member of the core team of Defrost Finance, acknowledged that Defrost v2 had been targeted by a flash loan attack shortly after a few users voiced their concerns about the odd loss of funds. The platform made the decision to shut down v2 while conducting further research because it thought Defrost v1 was unaffected at the time.
PeckShield, a blockchain researcher, discovered that the hacker increased his or her profit by about $173,000 by manipulating the share price of LSWUSDC. The results of PeckShield’s study were as follows:
Defrost v1 was previously declared to be unaffected by the hack since it lacked a flash loan feature.
“Our study demonstrates the addition of a phoney collateral token and the use of an evil pricing oracle to liquidate existing customers. A loss of more than $12 million is anticipated.
Despite the company’s proactive announcement of the hack, the neighbourhood believes there may have been a rug-pull going on.
But afterwards, the platform recognised that v1 also faced an emergency, saying:
“Our staff is looking into it right now. We humbly request that the community hold off on using the V1 or V2 until upgrades are available.
Investors are advised not to use Defrost Finance any longer. An internal team is looking into the matter right now and will contact users via authorised methods.
The request for feedback from Cointelegraph has not yet received a response from Defrost Finance. Hackers from North Korea stole cryptocurrency from just one of the decentralised finance (DeFi) networks in 2022, totaling more than 800 billion Korean won ($620 million).
All North Korean hackers used foreign DeFi exploits, according to a spokeswoman for South Korea’s National Intelligence Service (NIS). Nevertheless, as a result of Know Your Customer (KYC) activities, the overall number of North Korean hacks decreased.
News Summary:
- Hacker of DeFi flash loan liquidates Defrost Finance users, losing $12 million
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