Layerswap Recovers From Domain Hijack, Refunds $100K

Layerswap’s Battle Against Cyberattack

Layerswap.io, the domain of Layerswap, a prominent protocol enabling seamless crypto movement between blockchains, exchanges, and wallets, experienced a hacking exploit last night. Approximately $100K in user funds was drained during the breach, leaving nearly 50 users financially compromised.

Users attempting to access the platform were redirected to a phishing website. Moments after hacking the domain, the malicious actor tried to modify Layerswap’s X account and prevent the company from accessing its social media channels.

Layerswap’s plight was exacerbated by delays in intervention from its domain registrar, GoDaddy. Thus, the hacker had prolonged control over the domain, aggravating the severity of the breach. It wasn’t until 11:07 pm UTC that Layerswap regained access to their GoDaddy account and reversed the actions made by the hacker.

Despite the daunting nature of the attack, Layerswap remains committed to the security of its users’ data and funds. Accordingly, the company has initiated a comprehensive refund process for affected users. Additionally, Layerswap pledged an additional 10% compensation to the affected users.

ParaSwap Records $24,000 Exploit

Meanwhile, decentralized finance (DeFi) aggregator ParaSwap discovered vulnerabilities during its Augustus v6 contract deployment. Thus, the protocol initiated a swift response to stop this deployment to prevent loss of user funds.

However, 386 wallet addresses had already initiated the token approval process using this contract. Nevertheless, a hacker capitalized on this vulnerability and siphoned approximately $24,000 from four distinct addresses.

ParaSwap urged affected users to report any unidentified losses and advised them to revoke token approvals promptly. Furthermore, the protocol recommended utilizing exploit checker services such as Revoke to safeguard against future threats.

Dolomite Exchange’s $1.8M Loss

Like LayerSwap, Dolomite, a prominent decentralized exchange (DEX), experienced a significant security breach resulting in a $1.8 million loss. The exploit further underscored the vulnerabilities inherent in smart contracts and the need for heightened security measures within the DeFi sector.

In its report about the incident, blockchain security platform CertiK stated that the exploit targeted an old contract previously utilized by Dolomite on the Ethereum network. Users who had previously authorized approvals to this contract were impacted.

It added that the hacker facilitated the exploit through the “callFunction.” Despite the default design of a “noEntry” modifier to prevent reentrancy attacks, the TradeManager contract lacked adequate protection, enabling the malicious actor to drain funds from unsuspecting users.

The funds siphoned off during the exploit were swiftly transferred to another wallet address and then deposited into Tornado Cash, a privacy-focused protocol. Dolomite’s development team acted promptly to turn off the compromised contract. Thus, other users won’t lose their funds. Nonetheless, the team advised users to revoke approvals to the affected Ethereum address as a precautionary measure.

DeFi Exploit Surges

These incidents add to a string of DeFi exploits recorded in March so far. Earlier this month, the Unizen protocol suffered a loss of over $2.1 million due to an approval exploit on Ethereum. Similarly, Mozaic Finance suffered a private key compromise, resulting in a loss exceeding $2.4 million.

On February 29th, Seneca Finance, a lending application, fell victim to a comparable attack, resulting in a loss of more than $6 million. These incidents highlight the persistent security challenges facing the DeFi sector.