Cream Finance Loses $25 Million To A Flash Loan Attack
August 30 2021 - 6:00PM
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PeckShield reported through a tweet of the new hack on Cream
Finance. The blockchain security company said a flash loan attack
on the decentralized finance lending and borrowing protocol.
#FlashLoanAlert https://t.co/JPW7e368qd — PeckShield Inc.
(@peckshield) August 30, 2021 PeckShield explained that the hacking
came through a 500 Ethereum flash loan from the attacker. This was
used to infiltrate a reentrancy bug in the smart contract of the
Flex Network. Usually, flash loans being undercollateralized can be
borrowed and repaid within a single transaction. Related Reading |
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Tezos As a DeFi protocol for lending, Cream Finance allows users to
earn interest from their deposited assets. Though Cream Finance is
a fork of the Compound protocol, its operation is quite different
from Compound or Aave. The platform has several more markets for
some esoteric digital assets. 1/4 @CreamFinance was exploited in
(one hack tx: https://t.co/JPW7e368qd), leading to the gain of
~$18.8M for the hacker. — PeckShield Inc. (@peckshield) August 30,
2021 This attack on Cream Finance was exploitation involving 1,308
Ethereum and over 418 million AMP, the native token of Flexa
Network. According to PechShield, the Ethereum records reveal that
over $6 million were hacked at 5:44 UTC. Cream Finance Becomes
Another DeFi Protocol Hacked In 2021 Furthermore, the Cream Finance
team members confirmed the authenticity of the hacking reporting.
Then, reporting on Discord Channel, the project’s official channel,
the members started working with PeckShield. The team revealed that
the hacking was on the CREAM v1 market on the Ethereum Blockchain.
Furthermore, they mentioned that it’s through the reentrancy of the
contract on the AMP token. At the time of writing, AMP’s value has
dipped by 15% within few hours to $0.05. Also, the value of Cream
Finance’s native token, CREAM, plummeted by about 6%. However, ETH
is at $3, 190.46 showing a slight dipping within the last 24 hours.
The total amount of the Crean Finance hacking is more than $25
million. The address of the hackers shows that they presently have
about $18.8 million. Amidst the hack, Cream Finance is down by 6% |
Source: CREAMUSD on TradingView.com The Cream Finance team has put
a stop to any further loss. The team said that it now has a pause
on AMP’s supply and borrow. It further acknowledged that the hack
doesn’t affect any other market. Eason Wu, the protocol’s
production Manger, disclosed this information on Discord. Recall
that earlier in the year; Cream Finance had a huge hack. The attack
led to the loss of $37.5 million worth of digital assets. According
to the report, the earlier hacking had a root cause from the
exploitation of Alpha Finance. Related Reading | Reports Show
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In India Flash loans have remained one of the controversial
features of decentralized finance. This’s because there’s no
collateral needed for the loans, and hence, they are susceptible to
hacks. This accounts for the recent attacks and hacks of flash
loans. A similar incident is a hack on the Bilaxy crypto exchange
on August 28. The exchange had a huge hot wallet hack that
compromised about 295 ERC-20 tokens. Also, a hack on Liquid on
August 19 resulted in a loss of about $100 million. Featured image
from Pixabay, chart from TradingView.com
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