GMX Faces $42 Million Hack, Offers 10% Bounty to Attacker
By: Isha Das
In a significant blow to the decentralized finance sector, GMX, a decentralized exchange, has suffered a major exploit resulting in the theft of approximately $42 million from its Arbitrum-based v1 perpetual trading platform. The attack has prompted GMX to offer a 10% white-hat bounty to the hacker in efforts to recover the stolen funds. The proposal includes an assurance of no legal action if the funds are returned within 48 hours, reflecting a common strategy among DeFi projects to mitigate losses from such breaches.
The exploit was identified by the blockchain security firm Cyvers, who traced the incident back to a malicious smart contract funded via Tornado Cash, a privacy tool often utilized to obfuscate transaction origins. The attacker targeted a variety of digital assets, converting them to Ethereum (ETH) and other cryptocurrencies. Significant amounts of the stolen funds have been traced as they were bridged to Ethereum’s mainnet, while the rest remain on the Arbitrum network.
The incident has created significant ripples in the crypto market, with GMX's token plummeting by 17% to a two-month low shortly after the news broke. In response to the exploit, the GMX protocol temporarily halted trading and minting activities on its v1 platform to prevent further disruptions. The decision was aimed at protecting the liquidity pool comprised of assets such as Bitcoin, Ether, and stablecoins.
This latest security breach has also drawn criticism towards Circle, the issuer of USDC, for its perceived delay in response to the attack. Despite the exploiter possessing $30 million in USDC at one point, Circle reportedly did not immediately freeze the funds. Security experts have expressed concerns over similar delays in the past, highlighting a need for more efficient risk mitigation strategies within the crypto ecosystem.
As the investigation continues, this incident serves as a stark reminder of the vulnerabilities within decentralized finance and the need for robust security measures as the industry evolves.
