- Euler users have lost millions of dollars in various tokens and coins.
- The hacker used a sophisticated scheme to exploit one of Euler’s smart contracts.
- Euler indicated that there was a possibility of recovering the stolen money.
The cryptocurrency space has suffered for the better part of this year. Lawsuits, stablecoins, closing crypto banks, and the broader Operation Chokepoint 2.0 have choked an already vulnerable industry.
However, the Decentralized Finance (DeFi) The space took another hit on Monday when lending protocol Euler suffered an exploit that saw millions stolen.
Fast loan attack
On Monday, cryptocurrencies were in for an unpleasant surprise when on-chain investigators began noticing some bad things going on with Euler. PeckShield, a blockchain security firm, tweeted early Monday morning: “Hi Euler, you might want to take a look.”
It turns out that Euler is small in size EthereumProtocol-based lending, it was tapped for about $200 million. The hacker stole a variety of tokens, including 8.87 million DAI, 849 WBTC, 85,690 stETH, and $34.4 million.
How did the hacker steal the money? According to blockchain security firm Slowmist, the attacker used flash credits to exploit a bug in one of Euler’s smart contracts.
The attacker used quick loans to deposit funds and then used them twice to trigger the liquidation logic, donating the funds to the backup address and performing a self-liquidation to collect any remaining assets. pic.twitter.com/YFbZ5Ih8yH
– SlowMist (SlowMist_Team) March 13, 2023
But it appears that it is not the first time that a particular hacker has attacked an encryption protocol. ZachXBT, a known on-chain spy, said the Euler hack was likely the same person who exploited a Binance Smart Chain (BSC)-based protocol last month and moved funds through a crypto mixer. Tornado Cash.
Almost certainly Blackhat were exploiting some random protocol on BSC a few weeks ago and then the money was deposited into Tornado https://t.co/v7W4t3qR6f
– ZachXBT (@zachxbt) March 13, 2023
Euler’s original token, EUL, fell after the news. It is currently trading at $3.08, down 50% over the past 24 hours, according to data From CoinGecko.
While the attack was brutal, Euler hopes to recover the stolen money.
This is because the team behind the protocol, Euler indicated hours after the attack, that it knew those responsible and contacted them “to see if we can learn more about our options.”
Moreover, Euler also said that he reported the attack to UK and US law enforcement authorities to help recover the money.
An update on our work today to recover funds for users of the Euler Protocol.
Here are some of the actions we took immediately:
1. Stop the direct attack ASAP by helping to disable the EToken module, which has blocked deposits and poor donation functionality
2. TRM is engaged… https://t.co/6ZClE9uGoH
– Euler Laboratories (eulerfinance) March 14, 2023
Euler said she will continue to work with her partners and law enforcement to “resolve this as best we can.”
“We are devastated by the effect of this attack on Euler protocol users and will continue to work with our security partners, law enforcement, and the broader community to resolve this as best we can. Thank you so much for your support and encouragement.”
on the flip side
- If the attacker is a black hat hacker, the chances of returning the stolen funds are slim.
Why should you bother
Attacks on DeFi protocols are still prevalent in the crypto industry. Users should always do their due diligence when choosing which platform to invest their money in to avoid situations like the Euler hack.
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