DeFi Under Attack! $10 Million Disappears from Velocore DEX in Shocking Crypto Hack

DeFi just got hit again, and this time it’s a $10 million blow. A hacker swiped funds from Velocore, a decentralized exchange (DEX) on the zkSync and Linea blockchains on June 2, 2024. This raises a big question: are our crypto holdings safe in the wild world of DeFi?

Here’s what happened.

Uncovering the Breach

The breach was first discovered by cyber threat researcher Officer’s Notes. Velocore’s liquidity provider tokens, essential for the exchange’s operations, were compromised. The hackers stole over 1700 ETH, worth more than $7 million, and moved the funds to the Ethereum mainnet.

The attacker initially acquired Ether through Tornado Cash, a platform that enhances transaction privacy. The stolen funds were then routed through Across Bridge and back to Tornado Cash to anonymize the transactions. By the time the breach was detected, the hacker had transferred approximately 1700 ETH, or $7 million, to Tornado Cash.

Security Measures

Despite Velocore undergoing security audits by Zokyo, Hacken, and Scalebit, the hacker managed to exploit the platform. Fortunately, Velocore’s stable pools were unaffected, allowing users to safely withdraw their funds from these reserves.

The Velocore team is working with cybersecurity experts and centralized exchanges (CEXs) to freeze the stolen funds and prevent further losses.

Negotiations Are On…!

Velocore has figured out how the exploit occurred and is now negotiating with the attacker. The team has offered a 10% white hat bounty for the return of the remaining funds by June 3, 8:00 UTC. However, the hacker has not yet responded.

In their post-mortem report, Velocore promised to compensate those affected by the hack.

“those impacted, we were able to take a snapshot of the blockchain state prior to the attack. After operations resume, we will develop a proper mitigation plan in which, collectively, we can ensure the appropriate compensation has been made to those who lost money to the attackers. ”  

Velocore

Impact on Velocore: Market Reacts!

The hack significantly impacted Velocore’s native token, VC, which hit its lowest point post-attack. However, the token has since recovered and is trading at $0.004127 at the time of writing.

Despite the hack, traffic on the zkSync and Linea blockchains remained moderate, with both networks maintaining high transaction throughput and address activity before and after the attack.

Also Check Out : May Crypto Hack Report: $347 Million Wiped Out from Markets!

Is DeFi safe? There’s no definitive answer. What you can do is stay vigilant and follow best practices to protect your crypto holdings.