In yet another alarming incident within the cryptocurrency world, attackers targeted the Velocore exchange, resulting in significant financial losses. On Friday, the centralized exchange DMM Bitcoin was also compromised, leading to a $300 million loss. This was followed by a $10 million breach in a decentralized exchange.
What Happened to Velocore?
Velocore, which operates on the zkSync and Linea networks, fell victim to hackers. Such attacks on cryptocurrency platforms, especially decentralized ones, are becoming increasingly frequent. Often due to inadequate code auditing, these breaches can result in substantial financial losses for users and platforms alike.
After obtaining their loot, hackers can launder it through crypto mixers, making it easier than ever to escape with stolen assets. The initial report of the Velocore breach came from a threat researcher known as “Officer’s Notes.”
Who is Behind the Velocore Attack?
The Velocore team confirmed that liquidity provider tokens were the primary target. Following the breach, over 700 Ether were moved to the Ethereum mainnet. Despite having their code audited by Zokyo, Hacken, and Scalebit, the attackers managed to infiltrate the exchange.
During the attack, the Linea Blockchain experienced an hour-long pause, the cause of which remains unknown. Velocore announced they are exploring all options, including freezing assets, in collaboration with centralized exchanges.
“We have identified the exploit mechanism and are establishing an on-chain negotiation process. A post-mortem article is being worked on. The exploiter’s trail is being tracked with the clues left behind. More updates soon. Velocore on the Telos mainnet was not affected, and we are working with the foundation while functions are frozen. Guidance on safely withdrawing all funds will be provided in the future,” the team stated.
Key Takeaways for Investors
– Ensure that exchanges have comprehensive and up-to-date security audits.
– Consider using hardware wallets or other secure methods to store large amounts of cryptocurrency.
– Monitor announcements from exchanges about security breaches and actions taken.
Conclusion
The path to reimbursement or compensation for affected investors remains uncertain as Velocore has yet to disclose a clear plan. This incident adds to the staggering $773 million worth of exploits recorded in the first half of the year, with $51 million stolen in May alone across 21 different attacks. Investors are anxiously awaiting further updates from the Velocore team.
