Ethereum-Based DeFi Protocol Furocombo Attacked

The increasing attacks associated with cryptocurrency continue to worry many around the space, who feel that the menace is becoming too prevalent. The overall figures for attacks for 2020 massively dropped compared to that of the year before, according to Coinmetrics. Several crypto exchanges, Decentralized Exchanges (DEX), DeFi protocols, and many other crypto servicing firms have been forced to improve data protection and security in a bid to curb these vices. However, the crypto attacks are looking not to slow down, as Furocombo, a DeFi protocol currently being serviced by the Ethereum network, is the latest victim of the prevalent attack.

Estimated losses in cryptocurrency amount to $14 million

The rate of DeFi attacks has also been high recent, with many hackers and scammers looking towards exploiting the growing space. However, Furocombo, one of the protocols trying to pave the way for itself in the competitive young market, has now reportedly lost about $14 million worth of cryptocurrencies in the latest attack. The Ethereum-based protocol, which confirmed the attack on 27th February 2021, had immediately sent out warnings to all of its users to halt transactions for now.

In its official message to the users, the protocol had informed them the breach had forced them to deactivate some of its features and warned them also to do the same to prevent further losses. The message sent to the users was tailored explicitly to token approvals, as it wanted to prevent more losses by asking them to be more cautious.

According to Igor Igamberdiev, one of the Furocombo team’s researchers, he explained that the attack was conducted by the exploitation of the DeFi protocol’s smart contract, as the attacker deceived them into processing a fake document believed to be owned by another protocol, Aave. The hacker tricked the Furocombo users into approving, and as users approved it, the cryptocurrency was moved to the attacker’s address.

This is not the first case

According to the report, the attackers carted away with about 3,900 staked Ethereum tokens, amongst other cryptocurrencies. Dinngo, the crypto exchange which is in charge of the Furocombo protocol, had also publicly discussed the attack with the press. Hsuan-Ting, the CEO of the exchange, had come out to offer an official apology to the users affected, as he promised that they are working behind doors to restore normalcy.

The executive also mentioned that the losses incurred by users in the attack would be reimbursed, as the firm is working with their insurance managers to come up with something. Many analysts like Julien Bouteloup have publicly condemned the attack, as the Curve Finance Executive believes that the prevalence of attacks like this will not aid the DeFi space’s growth.

Julien Bouteloup believes that the previous successful attacks of this nature on Alpha Finance and Pickle Finance mean that the DeFi space will likely see more of these attacks in the future. However, Julien Bouteloup has called on DeFi protocols to bolster security for the good of the overall DeFi space.

Leave a Reply

Your email address will not be published.