DeFiJul 13, 2023

Another attack on the DeFi ecosystem. Rodeo Finance robbed of $1.5 million

The latest face of hacker activity targeting the decentralized finance protocol.

Recently, we are witnessing again a dynamically growing number of exploits for decentralized financial protocols. Just yesterday, the world was shocked by information about an attack on the popular DeFi platform - Arcadia Finance. This attack resulted in the theft of relatively high-value digital currencies, and today another nuclear bomb is falling on the DeFi ecosystem. This is because it was revealed that on July 11, Rodeo Finance's Arbitrum-based financial protocol fell victim to a dangerous exploit. As a result of this negative event, the Ethereum cryptocurrency worth about $1.5 million was stolen.

The series of attacks on the DeFi exosystem continues

There can never be a calm situation in the digital currency sector. This pessimistic state of affairs is constantly ensured by numerous hackers who consistently carry out dangerous and numerous attacks on elements from the sphere of decentralized finance (DeFi). Already at the beginning of 2023, cybersecurity specialists warned the cryptocurrency community that the number of attacks on decentralized financial protocols will definitely increase. The first two quarters of 2023 took a total of around $656 million in losses as a result of repeated exploits and cryptocurrency scams.

Yesterday in the morning, the popular financial protocol Arcadia Finance reported on an exploit that resulted in the theft of cryptocurrencies with a total value of over $400,000. In addition, it was reported that the management board of this company is temporarily suspending operational activities, as it turned out that the Arcadia Finance system had a security gap, which then allowed to compromise the security of funds stored on the platform. It is worth adding that on this occasion, further technical problems came to light, which threaten to cause further losses in the future.

– At present, there is also a definite lack of protection against reentrants, which consequently allows immediate repayment of the liability, omitting the internal system check of the safe state – informed PeckShield, a well-known company dealing with security on blockchains.

However, the analytics company mentioned above additionally reported that another scandalous attack was carried out this morning. This time, hackers attacked the Rodeo Finance platform and as a result of the criminal action, 810.1 Ethers were stolen from this financial protocol, which at the current exchange rate is worth approximately USD 1.5 million. What's more, PeckShield determined that the funds had already been transferred from the Arbitrum second layer network to the Ethereum mainnet.

After transferring the stolen funds to their home blockchain, the hacker exchanged them for a number of other digital assets in order to cover the traces of the funds' origin. This was most likely to convert them to ETH again. The criminals then sent the stolen digital assets to the Tornado Cash cryptocurrency mixer to prevent their true origin from being traced.