In a significant security breach, the decentralized finance (DeFi) protocol Sturdy Finance fell victim to an attack that resulted in the loss of approximately $800,000 worth of Ether (ETH). This incident serves as a stark reminder of the vulnerabilities that can be exploited within DeFi platforms. In this blog post, we will delve into the details of the attack, the response from Sturdy Finance, and the underlying causes of the exploit.
On June 12, Sturdy Finance was alerted by blockchain security firm PeckShield about a suspicious transaction related to price manipulation. Shortly after being notified, the DeFi protocol promptly paused all its markets to prevent further fund drainage. It was discovered that the attacker had taken advantage of a vulnerability in a faulty price oracle, ultimately allowing them to drain funds from the protocol.
Response and Mitigation
Sturdy Finance responded swiftly to the exploit, assuring its community that no additional funds were at risk. Despite their efforts, the attacker managed to transfer the stolen funds, totaling 442 Ether, to the crypto mixer Tornado Cash. This incident highlights the challenges faced by DeFi platforms in maintaining robust security measures to protect user funds.
Faulty Price Oracle and Reentrancy Attack
PeckShield identified the “root cause” of the exploit as a faulty price oracle, emphasizing the importance of accurate and reliable oracles within DeFi protocols. Additionally, blockchain security company BlockSec shed light on the attack technique employed by the hacker—reentrancy attack. By repeatedly calling a function in a single transaction before the initial function call is complete, hackers can withdraw more funds than intended. This method has become a common strategy for exploiting DeFi platforms.
Crypto Scams and Twitter Account Takeovers
In a parallel development, scammers seized control of eight Twitter accounts belonging to prominent members of the crypto community. The compromised accounts were then used to promote crypto scams, resulting in the theft of nearly $1 million in cryptocurrencies. This incident serves as a reminder of the importance of robust security measures, not only within DeFi platforms but also across various digital platforms where crypto-related activities take place.
Turning to a different case, the United States Justice Department has charged two individuals allegedly involved in the infamous Mt. Gox hack. Alexey Bilyuchenko and Aleksandr Verner, aged 43 and 29 respectively, stand accused of stealing and conspiring to launder a staggering 647,000 Bitcoin. This ongoing case sheds light on the persistent challenges posed by cybercriminals in the cryptocurrency space.
The attack on Sturdy Finance serves as a stark reminder of the vulnerabilities present in DeFi protocols and the importance of maintaining robust security measures. The exploit, executed through a faulty price oracle and a reentrancy attack, highlights the need for continuous vigilance within the DeFi community. The incidents involving Twitter account takeovers and the Mt. Gox hack further underscore the persistent threats faced by the cryptocurrency ecosystem. It is imperative for individuals and platforms alike to prioritize security to safeguard the integrity and trust in this rapidly evolving space.