DeFi protocol Gamma loses 1500 ETH worth $3,4 million in exploit

A hacker has begun transferring funds to the Tornado Cash crypto mixer

04.01.2024 - 14:54

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3 min

What’s new? Gamma Strategies DeFi protocol was exploited, and auditors from blockchain companies PeckShield and BlockSec estimated the damage at $3,4 million. Thus, the hacker withdrew 1500 native coins of the Ethereum blockchain. To prevent further damage, the project team temporarily disabled the ability to deposit funds, while withdrawal remains available and Gamma vaults are managed normally.

The Block’s material

What else is known? Gamma decentralized protocol allows users to deposit funds into pools and receive income from liquidity management. It supports over 50 trading pairs and cooperates with more than 10 market makers. The total value locked (TVL) of the project exceeds $100 million. The protocol functions on five blockchains, including Ethereum and Arbitrum.

According to Gamma developers, the depositing feature will not be resumed until the problem is identified and fixed.

Source: Twitter.com

Following an interim investigation, they clarified that an attack on the protocol is not possible without depositing funds

Source: Twitter.com

BlockSec experts point out that there is a critical vulnerability in the protocol’s accounting mechanism. The auditing company reported inconsistencies in the way deposits and withdrawals were accounted for, which led to a discrepancy between liquidity and rewards.

PeckShield later reported that the hacker transferred some of the stolen funds, 1000 ETH worth $2,2 million, to cryptocurrency mixer Tornado Cash, which was placed on a sanctions list by US authorities for facilitating money laundering by North Korean hackers.

Source: Twitter.com

In turn, the developers of Gamma offered the hacker to enter into negotiations for the return of part of the funds.

Late last year, the Thunder Terminal platform lost over $247 000 as a result of the exploit. And the KyberSwap exchange, which was hacked for $47 million, laid off 50% of its employees to cut costs.

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