A hacker has stolen around $455,000 from decentralized decentralized finance (DeFi) protocol Arcadia Finance by exploiting a vulnerability in its code.
The PeckShield Blockchain investigator he issued a warning on the Arcadia Finance hack, stating that the reason was “lack of validation of unreliable entries”. The code lacked a validation mechanism to cross-check unverified inputs. This flaw allowed the hacker to withdraw funds worth approximately $455,000 from the Ethereum (darcWETH) and Optimism (darcUSDC) vaults.
Arcadia Finance has not yet responded to Cointelegraph’s request for comment on the hack. However, the team told Cointelegraph that the underlying reason cited by PeckShield was wrong.
Arcadia Finance confirmed the hack two hours after the PeckShield indictment and subsequently suspended the contracts to prevent further leakage of funds.
We are known to take advantage of our protocol.
We have suspended the contracts and are investigating the root cause with security experts as we speak. More information will be available as it becomes available.— Arcadia Finance (@ArcadiaFi) July 10, 2023
We know there is a potential flaw in our protocol. We have terminated contracts and are currently investigating the root cause with security experts. More information will be provided as it becomes available. — Arcadia Finance (@ArcadiaFi) July 10, 2023
While investigations are underway, there is another vulnerability in Arcadia’s code, which if exploited could be catastrophic for the protocol. According to PeckShield:
“Furthermore, there is a lack of reintegration protection, which makes it possible to avoid instant liquidation of the vault’s internal health check. »
Most of the stolen funds came from Optimism – around 180 Ether (ETH) – and were laundered through Tornado Cash. However, stolen Ethereum tokens – valued at over $103,000 at the time of writing – are still parked at the suspicious wallet address.
Also Read: MPC Multichain Bridge Records Outflow Of Over $100M Sparking Hack Fears
In the second quarter of 2023, a cumulative loss of over $300 million resulted from hacks and exploitation of vulnerabilities in the crypto space.
A report from blockchain security firm CertiK revealed that a total of 212 security incidents were recorded during the quarter, resulting in a loss of $313,566,528 to Web3 protocols.
Compared to data from the second quarter of the previous year, CertiK found that crypto hacks decreased by 58%. BNB Smart Chain had the most incidents, with 119 incidents resulting in losses of $70,711,385.
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