Cryptocurrency Platypus was hit by a targeted attack that saw the newly launched stablecoin get exploited for an enormous $8.5 million.
Platypus USD was introduced on February 6. Ten days later, it was hit by an attack that saw a hacker manage to exploit it for $8.5 million.
The newly introduced cryptocurrency was designed to be a stablecoin. This is where it is ‘pegged’ as a direct exchange for the US dollar. One USD equals a Platypus USD. However, the attack caused the exchange rate to fall to 48 cents per coin and the team announced that it would be ceasing “all operations… until we get more clarity”.
According to reports, the $8.5 million loss was caused by a flash loan attack. This kind of attack is where an individual will take a loan without any collateral needed, and drain any assets from cryptocurrency projects.
How cryptocurrency Platypus was hacked
While the funds appear to still be in the account, Twitter user Daniel Von Fange highlighted how the attack happened. After requesting a large “emergency withdraw”, the code didn’t have the correct checks in place to prevent this from happening.
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In the two hour old Platypus hack, it looks the attacker deposited 44 million, borrowed 42 million, and then used the emergencyWithdraw(), which happily gave the attacker the full original deposited funds back – no deductions for the borrow. pic.twitter.com/QncRrRYg8j
— Daniel Von Fange (@danielvf) February 16, 2023
Analyst ZachXBT pointed out that Tether, an exchange for crypto, had managed to blacklist the currency on the blockchain not long after it happened. ZachXBT also managed to find who committed the hack and claims that Platypus are wanting to negotiate before contacting law enforcement.
Hi @retlqw since you deactivated your account after I messaged you.
I've traced addresses back to your account from the @Platypusdefi exploit and I am in touch with their team and exchanges.
We’d like to negotiate returning of the funds before we engage with law enforcement. pic.twitter.com/oJdAc9IIkD
— ZachXBT (@zachxbt) February 17, 2023
The world of cryptocurrency is still under regular security threats, as it wasn’t that long ago that an actual developer on Bitcoin lost $3.3 million in a hack.
Meanwhile, influencers and other major companies are being scrutinized for their operations within the crypto world. Recently, Logan Paul was ousted as having effectively “scammed” his fanbase that joined his Web3 game.
Software engineer turned crypto researcher Molly White has tracked via the website, Web3 is Going Great, that an estimated $11.915 billion has been lost since Feb 2021. This is mainly due to massive losses from collapses and scams, the most high-profile of which is the collapse of FTX.