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Abracadabra Money DeFi Platform Suffers Cyberattack
Popular Ethereum-based decentralized finance (DeFi) lending protocol Abracadabra Money experienced a platform attack on January 30. The incident was announced on the protocol’s official handle, acknowledging an exploit on its platform related to certain cauldrons on Ethereum. The engineering team is actively investigating the situation and has pledged to buy back Magic Internet Money (MIM) from the market to burn.
Financial Impact
In response to the crypto theft, the decentralized autonomous organization (DAO) treasury of Abracadabra will be repurchasing MIM tokens from the market and burning them. The exact amount stolen in the attack has not been disclosed by the platform.
According to Cyvers Alerts, the perpetrator managed to abscond with $6.5 million in crypto assets, with over 2,740 Ether tokens illicitly withdrawn from Abracadabra Money’s wallet address. Subsequently, approximately $4 million of the stolen funds was transferred to a new Ethereum-based wallet address.
Hacker’s Modus Operandi
Blockchain security and analytics firm Peckshield revealed that the hacker initiated the cyberattack using 1 Ether funded through the US-sanctioned crypto mixing protocol Tornado Cash. This points to a growing trend of cyber threats targeting DeFi projects within the crypto industry.
Trend in Crypto Thefts
The recent hack on Abracadabra Money is part of a broader trend within the crypto industry, particularly in the DeFi sub-sector. Since its launch in August 2020, smart contract-backed financial systems have been consistently targeted by cyber threat groups. While there was a decrease in total crypto losses in 2023 compared to the previous years, the number of cyber threats increased slightly, indicating a persistent challenge in securing DeFi platforms.
Decline in Crypto Thefts
Notably, the total losses from crypto thefts in 2023 decreased by 54.3% compared to the previous year. The drop was mainly attributed to a reduction in DeFi hacking incidents. Despite this decline, the report by Chainalysis highlighted a slight increase in the number of cyber threats in 2023 compared to 2022.
Role of Bad Actors
The report also emphasized the role of bad actors, with the North Korea-backed Lazarus Group accounting for a significant portion of the total losses in 2023. The group launched a record number of 20 attacks, underlining the persistent threat posed by cybercriminals in the crypto space.
Security Measures and Asset Amounts
Chainalysis attributed the lower loss ratio to improved security measures and lower amounts of digital assets in the DeFi space. These factors have contributed to a decline in the value lost in DeFi hacks, reflecting efforts to enhance security within the decentralized finance sector.