Huge Losses for Euler Finance as $195M Theft Occurs in Flash Loan Attack

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Source: AdobeStack / Sashkin

Ethereum-based lending platform Euler Finance has suffered a major blow from a flash loan attack resulting in approximately $200 million worth of digital assets being stolen from the project.

The losses occurred across six transactions in dai (DAI), wrapped bitcoin (WBTC), staked ether (sETH) and USDC, and were carried out by two attackers, according to crypto analytics firm Meta Seluth.

The company suggested that the attack is related to the deflation attack one month ago. The hacker utilized a multichain bridge to move the funds from the BNB Smart Chain (BSC) to Ethereum and launched the attack today.

Euler Finance confirmed the attack in a recent tweet. The project stated they are working with authorities and will provide more details as soon as they have a clear picture of what happened.

“We are aware and our team is currently working with security experts and law enforcement,” Euler Finance stated in a tweet. “We will release further information as soon as we have it.”

The attack, estimated at around $196 million, has already become the largest hack of 2023.

Euler Finance, a lending platform that allows investors to lend and borrow a variety of crypto assets, has found increasing popularity for providing liquid staking derivatives (LSDs) services. LSDs are a relatively new type of token that enable stakers to increase potential returns by unlocking liquidity for staked cryptocurrency, such as Ether.

DeFi Continues to be Vulnerable to Hacks

Flash loans enable DeFi users to borrow millions of dollars with zero collateral. This isn’t crypto magic or free money: The loan must be repaid before the transaction ends or the smart contract reverses the transaction – as if the loan never existed. They are a popular way for attackers to gain funds to conduct exploits on decentralized systems.

Earlier this year, Platypus, another DeFi protocol, was hit with a flash loan attack, draining over $8.5 million. However, with the help of some on-chain detectives, the project managed to track down the hacker and even recover some funds.

The recent hack comes as crypto remains rife with exploits and manipulations. As reported, the industry lost approximately $4 billion worth of digital assets to hacks, frauds, scams, and rug pulls last year.

Of the various forms of illicit activities, hacks accounted for the majority majority of crypto losses in 2022. More specifically, hackers stole over $3.7 billion, or more than 95% of all crypto lost in the year. Frauds, scams, and rug pulls comprised only 4.4% of the total losses.

 

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