Sturdy Stablecoin Reopens After Massive Exploit of $800K

A DeFi platform Sturdy stablecoin Finance, resumes full business activities today, June 16, 3 days after the recent exploit on its platform. 

In a recent tweet on June 16, the lending platform announced that the Stablecoin market is now unparsed, granting user access to their funds. The DeFi protocol reassured its users that their funds remained secure, stating, “No funds in this market were ever at risk.” 

Stablecoin Market Resumes on Lending Platform, Assuring Users of Fund Security

DeFi exploitations, which involve security vulnerabilities and unauthorized access, pose significant risks to users’ funds and the overall stability of the DeFi ecosystem.

According to the tweet, the platform claimed that the temporary pause of the stablecoin market was a precautionary measure taken to ensure safety. Attached is a report outlining the exploit and an update on their investigation published by Sturdy Finance for the community. 

Notably, Sturdy Finance was alerted by a blockchain security firm PeckShield, reporting a transaction that seemed to be related to price manipulation.

After nearly an hour, the DeFi protocol acknowledged the exploit and promptly took action. They swiftly halted all their markets and reassured their users that no further funds were in jeopardy.

PeckShield confirmed that the attacker managed to move 442 ETH (approximately $800,000) to Tornado Cash which helped them to hide the funds, even though the DeFi lending platform acted quickly. The exploit was executed by leveraging a flawed price oracle, which allowed the attacker to withdraw funds from the platform.

The blockchain security company also pointed out that the hack was done through a common hacking method known as a reentrancy attack.

This method allows hackers to manipulate the system by repeatedly calling a function in a single transaction before the initial function call is complete. By doing this, hackers can withdraw more money than they were supposed to, surpassing the usual limits that are in place.

However, in a tweet by Sturdy Finance executive, he said they’re offering a $100,000 bounty to the hacker who performed the attack.

But, if the hacker refuses to return the funds to their wallet, the team emphasized that they’ll offer the money to anyone willing to assist them in arresting or recovering the funds.

Notable Exploits in the Crypto Market 2023

GDAC Hack

A centralized crypto exchange, GDAC, based in South Korea, was targeted in its first-ever attack. This incident marked a significant milestone for the exchange as it faced a security breach for the first time. On April 9, the perpetrator seized control of GDAC’s hot wallets, resulting in a staggering theft of nearly $14 million. 

According to an announcement made by GDAC CEO Han Seunghwan on April 10, the exchange temporarily suspended all deposits and withdrawals and is currently undergoing emergency server maintenance.