• Security firm PeckShield reported that a BNB thief, involved in the theft of $600 million last year, has lost collateral worth $60 million on the Venus Protocol’s borrowing and lending platform.
• The hacker had pledged stolen funds as collateral to secure a substantial loan through Venus Protocol, but due to sudden increase in bond yields, the loan was undercollateralized and forced liquidation of assets.
• Breaches such as these highlight vulnerabilities within the DeFi sector and emphasize the need for legal requirements mandating smart contract audits.
BNB Hacker Involved in Enormous Theft
Security firm PeckShield reported that a hacker who stole nearly $600 million worth of BNB last year has lost funds of $60 million in collateral on the Venus Protocol’s borrowing and lending platform.
The hacker had pledged stolen funds as collateral to secure a substantial loan through Venus Protocol. However, a sudden surge in bond yields within the past 24 hours caused digital asset values to drop below Venus Protocol’s minimum threshold, resulting in liquidation of three loans worth $148 million.
DeFi Vulnerabilities Exposed
This attack aligns with similar incidents from 2022 attributed to Lazarus, a North Korean cybercrime group suspected of funneling proceeds into a government nuclear program. The surge in bridging attacks underscores the vulnerabilities within the Decentralized Finance (DeFi) sector and emphasizes the need for legal requirements mandating smart contract audits.
Bridges Create Vulnerability
Bridges are smart contracts that facilitate seamless transfer of tokens across different blockchains but they lack legal requirements mandating smart contract audits which leaves them vulnerable to security flaws; malicious actors can exploit these vulnerabilities to access locked funds.
Centralization Offers Containment
Following last year’s hack, Binance took decisive action by suspending all deposits from bridges containing stolen funds and preventing their movement from one blockchain network to another. Centralized nature of bridges offers containment when responding to breaches and helps protect investors from further losses.