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The decentralized finance (DeFi) platform Arcadia Finance was targeted in an attack that led to the loss of around $3.5 million in crypto assets.
The issue came from a weakness in the platform’s Rebalancer contract. According to a report by Cyvers, the attacker exploited a part of the contract that allows users to input custom swap data.
On July 15, the attacker deployed a malicious contract, which triggered the exploit within under a minute. After taking the funds, they exchanged them for Wrapped Ethereum
$3,001.95
on the Base chain. They then transferred the WETH to Ethereum’s
$3,015.97
main network using a bridge.
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The tokens taken in the first round included about 2.3 million USDC
$1.00
and 227,000 USDS, which made up roughly $2.5 million of the loss. During the exchange process, the attacker also received 199 WETH and almost 966 million AERO tokens. These were spread out across twelve affected wallets.
After the initial breach, Arcadia was hit again. This second round of theft happened through multiple transactions and took nearly another $1 million.
The Arcadia Finance team confirmed the issue through a post on X, which reads:
The team is aware of unauthorized transactions via a Rebalancer. Remove all permissions for asset managers. More information will follow.
The platform also asked users to take action by canceling any permissions tied to the Rebalancer contract to avoid further risks.
On July 9, GMX’s first-generation decentralized exchange (DEX), GMX V1, was temporarily suspended from trading. What happened? Read the full story.
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.
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