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Crypto heist: Curve loses USD 1.5+ bln

Wednesday 2 August 2023 12:33 CET | News

Cryptocurrency worth more than USD 1.5 billion has been removed from Curve Finance after a hack, impacting the DeFi market in the process.

 

Some of the crypto assets were stolen while the rest was moved for safekeeping. Curve Finance announced the discovery of a vulnerability that led to the incident. As a result of the hack, the total cryptocurrency value on the exchange has sharply declined by nearly 50%, currently standing at USD 1.62 billion, as reported by tracker site DeFiLlama.

The extent of the damage caused by the hack initially led to estimates of losses ranging from USD 20 million to more than USD 40 million. This significant decline can be attributed not only to the impact of the hack itself but also to the project's guidance to remove funds for security purposes.

While some of the funds were taken through the exploit, there is the possibility that certain funds were voluntarily removed by hackers who ethically exploit network vulnerabilities and then notify companies and organisations to rectify them. These ethical hackers, also known as white hat hackers, play a crucial role in strengthening the overall security of the decentralized finance (DeFi) ecosystem.

Cryptocurrency worth more than USD 1.5 billion has been removed from Curve Finance after a hack, impacting the DeFi market in the process.

 

The hack targeted four primary liquidity pools on the Curve Finance platform, which were compromised due to a vulnerability in Vyper, a widely used programming language within DeFi applications. To mitigate further risks, the project urged users of pools at higher risk to temporarily withdraw their funds until the situation is resolved.

The hack highlights liquidity concerns and DeFi industry resilience

Curve Finance holds a pivotal position as one of the most significant liquidity providers in the DeFi sector, particularly for stablecoins. However, the recent hack has raised concerns about its liquidity as it experienced a sharp decline. Clara Medalie, the director of research at crypto data firm Kaiko, highlights the importance of maintaining liquidity, especially for stablecoins, which require a tight trading range for stability in the market.

Despite the significant impact of the hack on Curve Finance, Michael Egorov, the founder of the platform, remains optimistic about the DeFi industry's resilience in the face of challenges. He emphasises that efforts are being made to minimise the consequences of the exploit, and he personally plans to reduce his loans, which are backed by CRV tokens, the native token of the Curve project. However, the hack has had some effect on the token's value, which declined by 17% following the announcement of the security breach, according to cryptocurrency site CoinGecko.

In the wake of this incident, the vulnerability in Vyper has drawn attention from the DeFi community, raising concerns about the potential for similar attacks on other DeFi projects utilising the same programming language. The DeFi industry has previously encountered various security challenges, and it remains crucial for developers and stakeholders to stay vigilant and proactive in addressing vulnerabilities to safeguard users' funds and uphold trust in the ecosystem.

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Keywords: cryptocurrency, hacking, cryptocurrency exchange, crypto, digital assets
Categories: DeFi & Crypto & Web3
Companies: Curve
Countries: World
This article is part of category

DeFi & Crypto & Web3

Curve

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