“Defi Disaster: Flash Loan Hacker Liquidates Defrost Finance, Causing $12M Loss for Users”
There have been complaints about loss of funds in the community which led Defrost Finance’s core team member Doran to investigate the situation. He confirmed to everyone that Defrost finance V2 was hit by a major hit with a flash loan attack.
Defrost Finance is a decentralized trading platform and it has announced on the Avalanche blockchain that both versions are either defrost v1 or defrost v2 in consideration. The investigations are in progress for the hack that happened.
They delivered the announcement when many investors came and dragged their questions regarding staked Defrost Finance (MELT). Avalanche with AVAX $11.65 are the tokens from the MetaMask Wallets.
It happened in the flash of moments and Defrost members immediately informed the users that it was hit with the flash of loan attack. However, when the announcement happened, it didn’t seem to the members that the loan hack was responsible for it. Eventually, they decided to bring v2 to a close and followed new investigations.
There were many tweets shared at that time. The blockchain investigator Peckshield has investigated that the hacker was caught manipulating the share price of LSWUSDC. This helped the hacker gain $173,000 which was solely for the hacker. It could be more than that for him. Peckshield investigated more and he found out that
“Our analysis shows a fake collateral token is added and a malicious price oracle is used to liquidate current users. The loss is estimated to be >$12M.”
The company was there to announce the hacker’s deal and felt protected however, the community wasn’t really satisfied, and they suspected a rug in the situation.
The v1 Defrost was suspected to be unharmed by the hack because it was the first version.
The platform was eager to describe the situation in other words. They said:
“Our team is currently investigating. We kindly ask the community to wait for updates and refrain from using either the V1 or V2 for the moment.”
Now the investors are prohibited to use Defrost until the company let them know the situation. They are saying that the internal team has been investigating the situation deeply for further information. The users will be notified soon about the situation.
In 2022, North Korean hackers have stolen crypto worth 800 billion dollars. It was stolen from just the Defi platforms alone known to be the Decentralized Finance.
An interview with a spokesperson from South Korea’s National Intelligence (NIS) informed the people of the current situation. He said that every North Korean hack is done based on overseas Defi exploits. They have been doing the wrong stuff till now.
There is an initiative introduced by the authorities which say the Know Your Customer Initiative which is held in place. In this regard, the North Korean hacks have been significant reduction. They can be helpful when it comes to the future but the investors are directed not to continue investing till they are updated.