KyberSwap, a decentralized exchange (DEX) aggregator and liquidity protocol, recently suffered a frontend exploit, losing $265,000 in the process.
How Did It Happen?
The KyberSwap team noticed that the attacker had inputted a malicious code in the protocol’s Google Tag Manager (GTM), enabling them to steal users’ funds. GTM allows the platform to easily update code fragments collectively known as tags.
As investigations were carried out, the project’s team discovered that the attack on the GTM was the cause and disabled it. With that, the malicious code that the hacker had deployed was halted, “with no further suspicious activity.”
KyberSwap said the hacker was “specifically targeting whale wallets with large amounts,” but was only able to steal $265,000 from two Polygon addresses on the platform. While the exploiter is yet to be found, the protocol noted that it will compensate the two affected addresses and any other addresses that might be affected.
Ethereum and Polygon addresses tied to the attacker have been identified and are currently being monitored by the team. Other crypto-based accounts on platforms like OpenSea connected to the bad actor have been identified by the project. Centralized exchanges were also notified of the attack and were told to block the funds should the attacker try to move them.
The KyberSwap team then mentioned that the attacker will be rewarded with 15% of the funds as a bug bounty if he returned the funds and communicate with them.
Increased DeFi Hacks
Since the boom of decentralized applications in 2020, there has been a rise in the occurrence of exploits through various means. While front-end exploits are not a common approach used by hackers, flash loans have frequently facilitated multiple successful hacks.
In July, the Solana-based DeFi yield platform Nirvana suffered a flash loan attack, losing about $3.5 million in the process. In April, another DeFi protocol, Deus Finance, got hacked for more than $13 million in a flash loan exploit.
Meanwhile, larger hacks have occurred in the crypto community this year, with the Axie Infinity hack recording the largest loss worth $625 million. Another is the Wormhole bridge hack which saw $318 million being funneled into the pockets of bad actors.
Your crypto deserves the best security. Get a Ledger hardware wallet for just $79!