The Ethereum-based lending platform, Euler Finance, was the victim of a flash loan attack on March 13in which the attacker stole millions in DAI stablecoins and other cryptocurrencies.
The exploiter conducted several transactions, stealing approximately $197 million.which now stands as the biggest hack of 2023, according to on-chain data posted on Twitter by research firm Web3 Omniscia.
According to reports, the attacker leveraged the vulnerable code to fund the protocol’s reserves and then used that cash to create a debt position of unbacked tokens. As a result, the attacker was able to liquidate these “underwater accounts”, making a profit from the bonuses.
The non-custodial lending protocol also confirmed the incident on Twitter, stating that they were aware, that his team was coordinating with law enforcement and security expertsand that they would provide more details as soon as they were available.
We are aware and our team is currently working with security professionals and law enforcement. We will release further information as soon as we have it. https://t.co/bjm6xyYcxf
—Euler Labs (@eulerfinance) March 13, 2023
EULER FINANCE TAKES MEASURES TO RECOVER LOST ASSETS
The British tech startup claimed to have started exploring the “illegal mining of funds” from the protocol. He insisted that his staff had contacted law enforcement authorities, shared information with them, and worked with external auditors and security companies in a effort to try to recover the assets and find out what exactly had happened.
«Our number one priority is to recover funds from Euler Protocol users, and we are working as hard as we can to achieve this.he tweeted.
Meanwhile, on March 14, Euler provided an update on the situation and informed its users that the vulnerable tokens module had been disabled. to prevent deposits and the vulnerable contribution feature from working.
The company said it collaborates with various security teams to conduct audits of its protocol, and that susceptible code was vetted and cleared during an external audit. However, the vulnerability was not detected during the inspection.
An update on our work today to recover funds for Euler protocol users.
Here are a few actions we took immediately:
1. Stopped the direct attack as soon as possible by helping disable the EToken module, which blocked deposits and the vulnerable donation function
2. Engaged TRM… https://t.co/6ZClE9uGoH
—Euler Labs (@eulerfinance) March 14, 2023
In addition, the firm reportedly hired TRM Labs, Chainalysis, and other ETH security communities to assist in the investigation and try to recover assets from Euler protocol users. They further state that they provided the information to US and UK security forces.
Defi protocol exploits are becoming more prevalent due to the rise of the cryptocurrency industry. As Crypto Economy recently reported, DeFi platforms lost an estimated $21 million to cyber attackers in February 2023. The biggest this year, however, is the most recent with Euler Finance.
