A hacker exploited a code vulnerability on Arcadia Finance’s Optimism and Ethereum vaults and siphoned over $455,000 worth of crypto funds.
According to PeckShield blockchain security company, the vulnerability occurred because the dApp’s smart contract lacked an input validation mechanism.
Our analysis shows that the @ArcadiaFi hack (w/ ~455K loss) is due to the lack of untrusted input validation, which is exploited to drain funds from both darcWETH and darcUSDC vaults. https://t.co/Fz3ogrswrI pic.twitter.com/hNsd3hMkDE
— PeckShield Inc. (@peckshield) July 10, 2023
Therefore, the app could not cross-check any unvalidated inputs, resulting in a loophole that saw hackers drain $455K of Wrapped Ethereum and USDC.
Acardia Finance confirmed the news of the hack via their Twitter in the following tweet, where they noted to have paused the contract. Thereby preventing further withdrawals by the hackers.
We are aware of a potential exploit in our protocol.
We have paused the contracts and are investigating the root-cause with security experts as we speak. More info will follow as it comes available.
— Arcadia Finance (@ArcadiaFi) July 10, 2023
The hacker proceeded to wash the entire stash of stolen funds through Tornado Cash. However, blockchain data suggests $103,000 of the stolen Ethereum still remains in the hacker’s wallet address. Meanwhile, the majority of the funds stolen were from the Optimism vault, around 180 ETH.
Hacks in the first two months of 2023 Q3 have resulted in a total loss of $300 million from the DEFI space. Data from blockchain security firm CertiK indicates 212 security breaches took place in Q2, resulting in a cumulative loss of $313.5 M.
Meanwhile, there was a 58% decline in total security breaches compared to last year, 2022 Q2. Nonetheless, this year’s data shows the BNB Smart Chain recorded the highest number of security breaches, over 119 incidents that resulted in a cumulative loss of $70,711,385.
Mubashir Ahmed is a multifaceted market analyst with extensive knowledge of the blockchain industry. He is proficient in market analysis and blockchain technology, having had experience with numerous projects in the space. He has a deep understanding of the Cryptocurrency industry, its trends, and how to best approach investing in it.
