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Hackers Drain $6 Million From DeFi Protocol
On Monday morning, the cyber security platform Cyvers Alerts informed the community about an ongoing attack on the DeFi borrowing protocol, Delta Prime. The initial report revealed that Cyvers’ system had detected multiple suspicious transactions involving the project on the Arbitrum chain. These transactions suggested that the DeFi protocol’s team had lost the private key, initially resulting in a loss of $4.5 million from the DPUSDC, DPARB, and DPBTCb pools. The suspicious draining address immediately swapped the USDC for Ethereum (ETH).
Within the next hour, Cyvers detailed that the attackers had seemingly changed the proxy, pointing to a malicious address. Other reports explained that “this malicious contract can inflate the deposited amount of the hacker on all pools.” Consequently, the attackers drained another $1.48 million from the pools before Delta Prime’s team regained control. Two hours after the initial reports, the DeFi platform addressed the incident.
According to the post, DeltaPrime Blue, operating on the Arbitrum chain, was attacked and drained for $5.98 million. The team confirmed that the attack was due to a compromised private key, with the cause still under investigation. Delta Prime’s team also assured users that DeltaPrime Red, on Avalanche, was safe from this attack, detailing that the “implementation here is covered solely by multisigs and cold wallets (as it should be).”
Additionally, the post claimed that the risk was already contained, reassuring its community that the DeFi protocol’s insurance pool would cover potential losses:
“The risk is contained, we’re working on asset-retrieval and the insurance pool will cover any potential losses where possible / necessary. Additionally, we’re looking into other ways to reduce user losses to a minimum.”
Are North Korean Hackers Responsible?
Despite the quick response, some users expressed their concerns about the incident. When questioned about it, the team explained that there were no timelocks for DeltaPrime Blue:
“This is exactly what timelocks are for. The switch from this hot & non-timelocked owner to a cold timelocked owner should have been done on Arbitrum like it was on Avalanche (and like other initial owners on Arbi).”
One community member criticized the team for not having the same security measures on DeltaPrime Blue as on DeltaPrime Red, stating that there was no excuse for the mistake. Moreover, on-chain sleuth ZachXBT suggested that the attack could be linked to a larger-scale problem.
A month ago, Zach assisted another team with a different crypto hack. The investigation unveiled that over 25 projects within the space had unknowingly hired multiple IT workers from North Korea using fake identities as developers. Today, the crypto detective revealed that the DeFi protocol was among the teams he alerted about the North Korean IT workers in August. He also noted that the method used for Delta Prime’s exploit was similar to the hack he originally assisted.
As of this writing, Delta Prime’s team has not addressed the possible link. However, they stated that they would focus on getting the funds back and that “the event isn’t over yet.”
Current Market Status
Ethereum is trading at $2,307 in the weekly chart. As the investigation continues, the cryptocurrency community remains vigilant, hoping for a quick resolution and recovery of the stolen assets.
