AFX lost $24,15 million USDC after an attacker attacked a bridge that was linked to the protocol for trading on July 22,
You can read more about it here:
- AFX’s cross-chain Bridge lost $24,15 Million USDC, while Arbitrum’s native bridge remained untouched during the attack.
- The perpetrator converted USDC stolen into Ethereum.
- As AFX, Arbitrum and security firms investigate this breach, they are tracing stolen funds.
Blockaid, the Arbitrum team and on-chain tracking followed the funds stolen to Ethereum.
Arbitrum’s native Bridge was not affected by the attack. AFX runs its own Layer 1 sovereign for permanent trading, but Arbitrum accepts USDC deposit through Arbitrum. The infrastructure affected was a third party bridge run by AFX and not Arbitrum’s main bridge.
AFX bridge loses $24.15 million USDC
Blockaid is a brand name. detected The attack took place at 9:30 pm UTC, on Saturday 22 July. According to the firm, an attack on a bridge run by AFX resulted in a loss of 24.15 millions USDC. Arbiscan records show that the transfer of 24150,000 USDC to the destination address was successful at 9:30:25 UTC.
A spokesperson for the firm stated that it worked with Arbitrum to help respond, notify the affected protocol, and limit the theft of funds. According to the latest public updates, at the time of publication, there had not been any confirmed recoveries.
AFX did not publish a postmortem technical report that would explain how an attacker was able to obtain authorization for the withdrawal of funds. Protocol did not announce a recovery plan.
Steven Goldfeder, co-founder of Offchain Labs, confirmed the transaction was suspicious and came from an unidentified protocol. He separated Arbitrum Bridge infrastructure from the AFX Incident.
“We’re aware of a report of a bridge hack on Arbitrum and are investigating. We can confirm that the transaction in question originated from a third-party protocol, and the Arbitrum native bridge has not been hacked or exploited in any way,” Goldfeder is a saying.
The team will coordinate with third party protocols and provide more information when it becomes available.
AFX runs its trading platform on a dedicated layer 1 while using Arbitrum for USDC deposit. AFX calls itself a derivatives platform that is decentralized and built on a sovereign-execution environment. In a recent protocol, it was also stated that users can deposit USDC before they access the perpetual markets of Arbitrum.
The exploiter turns stolen USDC to ETH
PeckShield stated that the attacker transferred the USDC from Arbitrum and converted the proceeds to 12,467.5 Ethereum. Lookonchain independently reported After moving funds, the exploiter purchased approximately 12,467 Ethereum at a price of $1.937 per unit.
After the conversion, the money was moved from a stablecoin pegged in dollars to Ether. This exposed all the assets to the price changes of ETH. The funds were tracked by the security team even after the exchange. The reviewed sources at the time of publication did not confirm Circle’s freezing the USDC prior to conversion, or the recovery of any ETH.
It is one of several incidents involving bridges that occurred in the past year. Crypto.news reported on the incident previously. reportedStake DAO has closed the vsdCRV brige after an arbitrum mint in May. According to the project, it has secured the tokens’ mainnet backing as well as contained the incident on one bridge.
A larger attack hit earlier in April Kelp DAO’s LayerZero-powered bridge. Around 116,500 RsETH (about $292 Million) were drained by attackers. Arbitrum later froze more than 30,000 ETH The funds transferred from Arbitrum One to the attacker’s account.
The investigation focuses on AFX infrastructure
Investigation now focuses on the AFX operated bridge and the authorisation process that led to the withdrawal of 24.15 millions USDC. Public statements have not established the root cause of the incident. The transaction confirmed shows that the contract for the bridge finalized the transfer. The incident may have been caused by faulty controls, compromised credentials of the validator or other weaknesses.
It is confirmed that the attack was not on Arbitrum’s native Bridge, but rather infrastructure run by AFX. Blockaid Labs, as well as Offchain Labs, both stated this in their first responses. Arbitrum’s native bridge continued to operate, as reviewed reports show.
The incident brings attention to AFX’s infrastructure for depositing funds. Protocol has promoted USDC deposit from Arbitrum to its trading platform. Changes to bridge, deposit or withdrawal operations are dependent on protocol response and ongoing investigation.
It is unclear how the case will develop. On-chain tracking has traced the value of stolen funds to approximately 12,467 Ethereum ETH. As they investigate the hack and trace the attacker’s money, AFX Blockaid team and Arbitrum are likely to provide more updates.
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Source: crypto.news
