DeltaPrime DeFi protocol loses $6 million on the Arbitrum network in an exploit

What’s new? DeltaPrime DeFi protocol, which runs on the Avalanche blockchain and the Layer 2 (L2) Arbitrum network based on the Ethereum blockchain, has lost $6 million in an exploit. IS firm Cyvers said the cause was a leak of an administrator’s private key.

Source: X.com

What else is known? Gaining access to the project’s wallet allowed hackers to replace contract addresses with their own and empty DeltaPrime pools in the Arbitrum network. After withdrawing funds, they began exchanging the stolen assets for ETH coins.

The incident occurred just two months after DeltaPrime lost $1 million in an attack. The cause then was a vulnerability that allowed the hacker to transfer ownership of the accounts, repay their loans and withdraw collateral. In total, he used 13 accounts.

Afterward, the DeltaPrime team said it re-audited the code and fixed the vulnerability. It also compensated the victims, with $900 000 recovered from the hack and another $100 000 taken from a contingency fund.

Commenting on the new incident, the team noted that $5,98 million has been withdrawn from the Arbitrum-based Delta Prime Blue protocol. The reasons for the key leak are currently being ascertained. In turn, the DeltaPrime Red protocol on the Avalanche network was not affected.

“The risk is contained, we’re working on asset-retrieval and the insurance pool will cover any potential losses where possible / necessary. Additionally, we're looking into other ways to reduce user losses to a minimum,” the developers concluded.

Source: X.com

Anonymous blockchain analyst ZachXBT, known for his investigations into hacks in the crypto industry, noted that DeltaPrime had previously hired IT professionals from North Korea.

He said that earlier this year, he warned developers against hiring employees from the sanctioned country. While DeltaPrime later assured that it had fired such employees, the potential link between the hack and North Korea remains unclear.

Source: X.com

Analysts have previously reported that North Korean hackers have been infiltrating crypto companies under the guise of employees to gain access to insider information and conduct attacks.

Hackers from the DPRK have been implicated in several high-profile incidents in the industry, including the $235 million hack of Indian crypto exchange WazirX in August and the $20 million hack of Indonesian crypto exchange Indodax this month.