Inverse Finance Loses $15.6 Million in Hacker Attack

Inverse Finance, a credit protocol within the Ethereum blockchain, fell victim to a hacking attack on Saturday. One or more cybercriminals have managed to steal cryptocurrencies worth $15.6 million.

According to the report, the attackers targeted Anchor (ANC). They were able to take crypto loans worth millions of dollars and leave coins as collateral for them, the value of which they manipulated.

If you want to find more details about the hacker attack on Inverse Finance and to read the latest market updates in the world of cryptocurrencies download for free our companion app. The Born2Invest business news mobile app brings its readers the most important financial news from around the world.

Third DeFi hack in a week

It was the third multi-million dollar attack on a DeFi protocol in the last week, drawing attention to the increasingly sophisticated techniques used by attackers. On Thursday, another credit log, Ola Finance, lost $3.6 million. On Tuesday, more than $625 million was stolen from Ronin Network. These are operators of the popular Web3 game Axie Infinity.

Inverse Finance tracks token prices using a Keep3r oracle. The attackers were able to trick the oracle into believing that the price of Inverse’s native token was exorbitantly high, PeckShield reports. They then used the inflated INV as collateral to take out a multi-million dollar loan from Anchor.

The attack was strikingly well thought out. The criminal or criminals first withdrew 901 ETH (about $3 million) from Tornado Cash – this platform makes crypto transactions anonymous. Then they deposited these coins into different pools on the decentralized crypto exchange SushiSwap. In this way, they drove up the price of INV so that it would be captured by the Keep3r price oracle like this.

Then they reached out to Anchor and used the sufficiently high INV price to borrow millions before lowering it back to normal levels.

A high-risk plan

A representative from PeckShield told CoinDesk that the plan was not without risk. Had the price of Inverse Finance’s token returned to a normal level before the attackers used the coins, the $3 million in Ether that was initially used would have been lost.

The attacker got away with 1,588 ETH, 39 YFI, 94 WBTC, and 3,999,669 DOLA. The majority of the funds were repatriated through the Privacy Mixer. It’s hard to say where the money will go. About $250,000 in Ether remains in their original Ethereum wallet.

Inverse assured that they had paused all borrowing on Anchor. A representative of the platform reported that they are working with Chainlink to develop a new INV oracle.

Inverse Finance also announced that it would submit a proposal to its DAO to ensure that all cryptocurrencies lost as a result of the attack would be fully repaid.

__

(Featured image by vjkombajn via Pixabay)

DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.

This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.

First published in CRYPTO MONDAY, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.