DeFi Cover Protocol Hacked and Binance Stops Trading COVER Token

The price of the COVER token has fallen by 80% after the discovery of a violation of its protocol.

Youtuber Ivan on Tech was one of the first to discover the use of a vulnerability on the Cover protocol, and the team is investigating the incident, as reported on their Twitter account.

Hacker preparations for the New Year

According to the available information, the hacker managed to take advantage of the error with the infinite issue of tokens using the Cover smart contract.

The attacker issued fake COVER tokens which he then placed in cash pools through Balancer, and then withdrawing the real COVER tokens.

After these events, the Binance crypto exchange announced the immediate termination of deposits, as well as the trading of the COVER token in the trading interface, in order to protect users.

There is still little information about this, and therefore Binance prefers to take the initiative by stopping trading of this token, which is listed on its trading platform.

It remains to wait for more information from the Cover Protocol team to learn more about this new DeFi hack, which is certainly not the last.

$ 450,000 stolen through security breach in DeFi Balancer protocol

The industry of decentralized DeFi financing is booming, and many projects are not always verified from a security point of view and are at the mercy of hackers looking for loopholes in smart contract protocols to steal cryptocurrency.

Like Cover Protocol, a good catch for a hacker who knew how to exploit the security breach of the very young project Balancer( BAL), a newcomer to the decentralized finance market.

As with the Cover Protocol, a bug in the flash lending protocol allowed the cybercriminal to generate multiple transactions that ultimately earned him nearly $ 450,000.

With this $ 23 million in WETH, the hacker began to exchange his WETH for STA (Statera). After 24 transactions, the pool’s STA balance dropped to STA 0.0000000000000000000001 due to the consumption of 1% per transaction.

The fraudster was then able to exchange the token for other assets from the DeFi Balancer platform pools at very low prices.

The hacker managed to steal 601 Ethereum ETH tokens, 11 WBTC tokens, 22,593 LINK tokens and 60,915 SNX tokens.

A good jackpot if you just use a security loophole, as was the case in previous cases with the bZx or dForce credit platforms. But the millions of dollars stolen from these platforms are a far cry from the $ 450,000 in Balancer’s case.

Balancer Labs said it will reimburse the stolen funds:

“After extensive discussions with the community, the Balancer Labs team has decided that it will fully reimburse all liquidity providers who lost funds as a result of yesterday’s attack”.

According to Balancer, the hacker is obvious to have deep knowledge and understanding of the basic DeFi algorithms to perform such an operation, which is clearly not available to a simple user.

So this is a new hack for DeFi and certainly not the last in decentralized finance.

Source: https://news.bit.team/defi-cover-protocol-hacked-and-binance-stops-trading-cover-token/

Official website: bit.team