A decentralized cryptocurrency exchange, Bunni, has lost more than $2.4 million in stablecoins to a cyber exploit. The exchange confirmed the issue on Tuesday through an official post on its page on X.
Bunni, in the statement, said it has suspended all smart contract activities on all the platform’s supported networks as a precaution. So far, various security firms within the Web3 space have confirmed the breach, while the exchange stated that it is investigating the issue and promises to provide an update in the meantime.
Initially, one of Bunni’s core contributors identified as @Psaul26ix raised an alarm, instructing users to remove their funds from their exchange without hesitation. As disclosed, the bad actors focused on the smart contracts of the DEX which is based on the Ethereum network, and moved $1.33 million USDC.
Also, the hackers drained $1.04 million in USDT from the smart contracts and moved all the funds to a single address. However, Euler co-founder and CEO, Michael Bentley confirmed that the platform itself didn’t suffer any breach.
Don’t forget that Bunni relies on Euler Finance, a decentralized protocol for crypto lending and borrowing for liquidity. Bunni is a decentralized exchange built on Uniswap v4 and deploys Liquidity Distribution Function (LDF), a separate custom system different from its host platform.
By that, the exchange offers increased returns for liquidity providers by optimizing liquidity allocation across price ranges. Victor Tran, the co-founder of KyberNetwork opined that the attacker manipulated the LDF by carrying out certain trades that activated some rebalancing systems.
Strong indicators established that the hacker executed fraudulent trades on many occasions and gradually drained the available funds in the protocol without any suspicion.
Hackers stole $163 million from crypto in August
Bad actors kick-started from where they stopped last month with the latest attack on Bunni. In August, the cryptocurrency sector lost $163 million to hackers who are now focused on high-value targets like exchanges and crypto whales.
The two top-profile attacks recorded during the month further support the assertion. First is a Bitcoin holder who lost 783 BTC worth $91 million in a single transaction to a social engineering attack.
Additionally, Turkish crypto exchange, Btcturk suffered a $50 million breach after bad actors gained access to one of its hot wallets. According to PeckShield, the digital assets industry recorded 16 cases of cyber attacks in August that claimed $163 million. The figure reflects a 15% increase in the crypto market lost to hackers in July.
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