Decentralized Exchange Velocore Exploited, $10 Million Loss Reported
Recently, Velocore, a decentralized exchange (DEX) operating on the zkSync and Linea blockchains, fell victim to an exploitation resulting in a substantial loss of approximately $10 million. This incident was brought to light by “Officer’s Notes,” a prominent threat researcher and writer, emphasizing the persisting vulnerabilities within the crypto space.
Velocore Investigates the Hack
– Hackers targeted Velocore’s liquidity provider tokens critical to the exchange’s functionality
– The malicious actors successfully transferred over 700 Ethereum across chains to the Ethereum mainnet post-breach
– Despite passing security audits by Zokyo, Hacken, and Scalebit, Velocore was still exploited
Linea Blockchain Disruption
– Linea Blockchain experienced a brief pause in block production during the hack
– Normal operations resumed roughly an hour later, reasons behind the disruption remain unclear
Response and Recovery Efforts
– Velocore’s stable pools were unaffected, enabling fund withdrawals from these reserves
– The team is working closely with security experts and has reached out to centralized exchanges (CEXs) to freeze stolen assets for damage control
“We’ve identified the exploit mechanism and are setting up an on-chain negotiation process. A post-mortem article is in the works. Tracking the exploiter with clues left behind. More updates soon. Velocore on the Telos mainnet has not been affected, and we are working with the foundation while functionalities are frozen. We will provide guidance on safely withdrawing all funds in the future,” Velocore updated.
– Community members affected by the exploit are demanding refunds from Velocore
– Compensation and refund plans have yet to be discussed by the project
Industry-Wide Security Challenges
– The Velocore incident is part of a larger trend in the crypto sector
– Recent hack at DMM Bitcoin, a Japanese crypto exchange, led to a $305 million loss
– The crypto industry has lost over $473.22 million to various exploits in 2024, excluding the DMM incident
– In May 2024 alone, the industry lost over $52 million through 21 distinct incidents
Hot Take: Understanding the Implications
As a crypto enthusiast, staying informed about security breaches in the industry is crucial to understanding the risks involved in decentralized platforms. The Velocore exploitation highlights the ongoing challenges faced by exchanges despite security audits, underscoring the importance of robust security measures and proactive response strategies. Stay vigilant and seek platforms with stringent security protocols to safeguard your investments in the ever-evolving crypto landscape.
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