DeFi Lender Inverse Finance drained for $1.6 million

Ethereum-based DeFi lending protocol Inverse Finance has suffered another hack. Peckshield was the first to observe the flash loan attack following which he revealed that the attacker had achieved an exploit via price oracle manipulation.

  • The blockchain security company said a price oracle manipulation misuses the asset balances in the pool to directly calculate the price of the LP token. It is greatly driven by the flash loan to modify pool reserves.
  • The hacker allegedly brought in around $1.6 million in funds from the DeFi protocol.
  • A closer look at the blockchain data shows that an initial fund of 1 ETH was used to launch the exploit and was sold via Uniswap, which was later withdrawn from Tornado Cash.
  • Currently, the hacker’s account still has 68 ETH of the illicit earnings while 1000 ETH has been deposited in the coin mixer.
  • Peckshield also revealed that the attack was allegedly carried out by a bot that runs the original hack.
  • In April, Inverse Finance was tapped for $15.6 million after an attacker targeted its Anchor money market and artificially distorted token prices to borrow loans against extremely low collateral.
  • Inverse Finance has yet to release an official statement regarding the incident.
  • Earlier today, the platform announcement that he had temporarily suspended borrowings.

“Inverse has temporarily suspended borrowing following an incident this morning where DOLA was removed from our money market, Frontier. We are investigating the incident, but no user funds were taken or were endangered. We are investigating and will provide more details soon.

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