GMX Platform Hacked for $42M, Offers 10% Bounty

GMX Platform Hacked for $42M, Offers 10% Bounty

GMX, a decentralized exchange, suffered a $42 million hack on its V1 platform via Arbitrum’s layer-2 network, offering hackers a 10% bounty for cooperation.

Sophisticated Exploit:

GMX’s security breach involved a sophisticated re-entrancy exploit affecting their V1 vaults. Key assets such as WBTC and ETH were stolen during this hack. An estimated $9.6 million was moved from Arbitrum to the Ethereum mainnet to launder funds.

Soon after the exploit, the GMX exchange team reached out to the hacker, offering a 10% white hat bounty. – source

Financial and Protocol Reactions:

GMX’s team, composed of decentralized contributors, admitted an attack on their V1 vaults occurred. By offering a 10% white hat bounty , they hope to recover stolen assets. The V2 contracts remain untouched, preventing wider contagion.

Market Reactions:

Financial markets reacted swiftly, with GMX’s native token dropping by 25% to $11.5. Trading paused on V1, with GLP tokens frozen on Arbitrum and Avalanche. Key DeFi protocols were reevaluated in light of these vulnerabilities.

Security and Resilience:

The aftermath sees active monitoring by security firms like PeckShield, which continued analyzing outflows and cross-chain transfers. Similar historical attacks underscore ongoing security challenges in DeFi. Authorities and institutional investors have yet to formally respond.

Insights suggest potential improvements in protocol security following this exploit. Continued focus will be on reinforcing defenses against re-entrancy vulnerabilities. Stakeholders and experts will likely push for greater cross-chain resilience to avoid repeat occurrences.