On yet another gloomy day for the decentralized finance (DeFi) community, several investors were left scratching their heads as another project got exploited.
DeFi project FinNexus has announced that it has been exploited, with the hackers minting 383 million of its native tokens FNX, valued at around $7.6 million at the time of the attack.
The unfortunate incident saw the hackers gain access to the networks’ private key, which gave them access to change the contract owner to another address, and subsequently minted 323 million and 60 million FNX tokens on Ethereum and Binance Smart Chain networks, respectively.
FNX Dips By Over 97%
After minting the tokens worth over $7 million, the tokens were dumped in the market causing the price to dip badly.
Moments before the hack, FNX was changing hands above $0.35, but immediately the unfortunate news broke out, causing the token’s price to plummet by more than 97%.
At the time of writing, FNX was trading at $0.028.
FinNexus Expected to Update Investors Soonest
FinNexus took to popular microblogging platform Twitter to announce the sad development while urging investors to take caution by withdrawing their funds from all liquidity pools as it hopes to regain control in earnest.
“We regret to inform our traders and investors that the FinNexus erc20 contract appears to have been hacked. For safety reasons, please withdraw your funds from the pools. The team is working on this issue and we will provide updates as they become available,” the firm said.
While many DeFi investors have little to no knowledge about how the industry works, a Twitter user with the username @chrisblec has given free tips to DeFi newbies, in order to avoid falling victim to projects with transferable ownership.
DO NOT HOLD A TOKEN THAT HAS TRANSFERRABLE OWNERSHIP WITH A SINGLE EOA OWNER.
Investigate transferrable ownership for noobs:
* Search token on Etherscan
* Click “Contract” address
* Click tabs Contract>Read Contract
* “New Owner”, “Transfer Ownership”, etc are your clues. pic.twitter.com/fE8mVHp2FY
— Chris Blec (@ChrisBlec) May 17, 2021
This is one of several cases that have seen hackers exploit a DeFi project, minting millions of tokens and further causing the price to dip.
Late last year, Coinfomania reported that hackers exploited a bug in Cover Protocol to mint 40 quintillion tokens.
Although the hackers, in an act of good faith, returned everything to the project, it did not stop the tokens’ price from dipping moments after the announcement was made.