Radiant Capital Faces Security Breach on Arbitrum Network
Radiant Capital, a major player in the crypto and DeFi space, recently experienced a security breach on its native USDC market on the Arbitrum network. According to PeckShield, around $4.5 million worth of ETH was compromised in the attack.
The Radiant DAO committee, consisting of web 3 security community members and developers, swiftly responded to the reports and temporarily halted the loan market on Arbitrum.
Flash Loan Assault: Exploiting the Lending Market
The security breach was a result of a flash loan assault, taking advantage of a window of opportunity that arises when a new market is launched in the lending industry. This exploit is similar to those seen on popular platforms like Compound and Aave.
In a flash loan attack, bad actors use flash loans to manipulate markets or exploit vulnerabilities in smart contracts. Flash loans allow users to borrow assets without collateral, with repayment made in the same transaction.
Crypto Industry Suffers $1.5 Billion Losses
Reports indicate that the cryptocurrency industry has lost $1.5 billion due to hacks and frauds as security concerns continue to rise. Radiant Capital acknowledged the issue and temporarily paused its lending and borrowing markets on Arbitrum while investigating the matter.
No funds are currently at risk, according to Radiant Capital. Once the investigation is complete, a comprehensive postmortem report will be released, and normal operations will resume on Arbitrum.
Hot Take: Security Breaches Highlight Vulnerabilities in DeFi
This recent security breach faced by Radiant Capital is part of a larger trend of attacks targeting the DeFi sector. The incident further emphasizes the vulnerability of decentralized finance platforms. Just days before, Orbit Chain’s bridging service, Orbit Bridge, suffered a significant loss of $82 million. These incidents highlight the urgent need for robust security measures in the crypto industry.
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