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Foreign Exchange-focused DeFi protocol DFX Finance was attacked on Nov. 11, with the attacker stealing roughly $4 million. The team has paused all smart contracts.
Stablecoin-focused protocol DeFi protocol DFX Finance has been hacked. PeckShield tweeted about the incident on Nov. 11, stating that the protocol’s DEX pool was exploited. The losses are currently estimated to be 3,000 ETH, worth about $4 million.
DFX Finance has acknowledged the incident, highlighting that it was notified about the suspicious activity20–30 minutes after the first transaction. The team paused all DFX contracts a few minutes after confirming the attack.
The attacker is already funneling the stolen funds into Tornado Cash to prevent tracking. Tornado Cash is of prime importance to bad actors, though governmental authorities are doing what they can to stop it.
The DFX Finance team also noted that there was an MEV bot that was able to extract value from the hacker and incidentally gain a large sum of funds. It asked the owner of this bot to get in touch.
Lastly, the team noted that Polygon contracts are susceptible to the same attack vector and, as such, will be initiating an emergency shutdown of those pools. The platform will release a postmortem of the attack soon.
DFX Finance has backing from big names
DFX Finance is a crypto FX trading protocol based on Ethereum that has a dynamically tuned bonding curve optimized for fiat-backed stablecoins using real-world FX price feeds. It is essentially a DeFi protocol for FX trading. The company’s backers have included Polychain Capital and Hex Capital.
The protocol’s token fell sharply after news of the hack, falling over 33% in the last 24 hours. The DFX token is hovering at around $0.167 at the time of publishing.
Incidentally, the DFX token was also mentioned in the Coinbase insider trading incident. The token was declared a security by the SEC, as were many other assets mentioned.
DeFi hacks mount in 2022
The DeFi hacks continue to pile up as we head into the final month of 2022. This year, the attacks have crossed over $3 billion. The popular choice among attackers this year is cross-chain bridges, which were responsible for more than $2 billion stolen.
Blockchain analysis firm Chainalysis reported that DeFi was responsible for a 60% rise in crypto hacks. The firm also observed that crypto mixing activity has reached an all-time high, which is not surprising given the growth in attacks.