Osmosis Suffers $5M Liquidity Pool Exploit
- Osmosis’ bug allowed users to add liquidity to any of its liquidity pools, and immediately withdraw 150% of their initial investment.
- The DEX noted that four individuals were responsible for 95% of the stolen funds, and that two have already volunteered to return $2 million.
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Decentralized exchange (DEX) Osmosis has lost roughly $5 million in tokens after attackers exploited a liquidity provider (LP) bug that appeared after its recent update, the DEX said in a series of tweets.
According to the announcement, the bug allowed users to add liquidity to any Osmosis LP and then immediately withdraw it for a 150% return on their initial investment. The bug was first reported in a Reddit post on 8 June, and while it was removed quickly, users were still able to take advantage of the exploit and drain around $5 million from Osmosis’ liquidity pools.
Osmosis’s team quickly decided to halt the network — which happened at block height 4,713,064 — after the exploit was discovered, and noted that it will remain halted for at least 48 hours. The DEX also assured users that all losses from the exploit will be covered, and that a recovery plan will be available in the near future.
The DEX noted on Twitter that the bug was “exploited intentionally by a small number of users” and “seemingly unintentionally by a few others”, with only four individuals being identified as being responsible for 95% of the exploited amount. Osmosis co-founder Sunny Aggarwal said in a post that two of the attackers have made a series of transactions to centralized exchanges, making them easier to track. He also wrote:
“Law enforcement has been notified. We’re hopeful that the exploiters will do the right thing here so that aggressive action will not be necessary.”
Shortly after Osmosis revealed the bug on Twitter, FireStake admitted that two of its members had exploited the bug for roughly $2 million following “a temporary lapse in good judgment”. After “stressing through the night”, the two decided to come forward and voluntarily return the funds.
- Popular Telegram bot Unibot, which is used to snipe trades on Uniswap, became a victim of a token approval exploit earlier today, when it was switching to a new router.
- After confirming the exploit, Unibot assured users that their keys and wallets were safe, and that the project will compensate all affected users.
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- DeFi protocol Balancer confirmed it was exploited almost a week after disclosing a critical vulnerability affecting several of its boosted pools.
- The platform did its best to mitigate some of the risks but was unable to pause the affected pools, and an estimated $980,000 in DAI were stolen in an attack.
- A cyber security incident at bankruptcy service provider Kroll has resulted in the exposure of “non-sensitive” customer data for claimants involved in the FTX and BlockFi cases.
- Both companies confirmed that account passwords, systems, and funds remained safe, but warned customers to be on the lookout for phishing scams.