Shocking Crypto Hack: Velocore DEX Loses $10 Million as DeFi Faces Attack
A massive blow has been dealt to the DeFi world as Velocore, a decentralized exchange (DEX) operating on the zkSync and Linea blockchains, fell victim to a $10 million hack on June 2, 2024. This incident raises concerns about the safety of our crypto assets in the unpredictable realm of DeFi.
The breach was initially uncovered by Officer’s Notes, a cyber threat researcher. Velocore’s liquidity provider tokens, crucial for the exchange’s functioning, were compromised, resulting in the theft of over 1700 ETH valued at more than $7 million. The stolen funds were subsequently transferred to the Ethereum mainnet.
The hacker employed various tactics to conceal their tracks. They obtained Ether through Tornado Cash, a platform that enhances transaction privacy, and then used the Across Bridge to reroute the funds back to Tornado Cash, anonymizing the transactions. By the time the breach was detected, the hacker had successfully transferred approximately 1700 ETH, equivalent to $7 million, to Tornado Cash.
Despite undergoing security audits by Zokyo, Hacken, and Scalebit, Velocore’s security measures proved insufficient to prevent the exploit. Fortunately, the hack did not impact Velocore’s stable pools, allowing users to withdraw their funds from these reserves without any issues.
In response to the attack, the Velocore team is collaborating with cybersecurity experts and centralized exchanges (CEXs) to freeze the stolen funds and mitigate further losses. They are also engaged in negotiations with the attacker, offering 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 to this offer.
Velocore has conducted a thorough analysis of the breach and is committed to compensating those affected by the hack. They have taken a snapshot of the blockchain state prior to the attack and will develop a comprehensive mitigation plan to ensure appropriate compensation for those who suffered losses to the attackers.
The hack had a significant impact on Velocore’s native token, VC, which experienced a sharp decline in value following the attack. However, the token has since recovered and is currently trading at $0.004127.
Despite the hack, the zkSync and Linea blockchains experienced moderate traffic, with both networks maintaining high transaction throughput and address activity before and after the attack.
In conclusion, the recent hack on Velocore highlights the ongoing concerns about the safety of DeFi. It is crucial for individuals to remain vigilant and adhere to best practices to safeguard their crypto holdings.