According to Coincu, DeFi protocol Linear Finance reported an attack on September 21, 2023, which resulted in the depletion of all liquidity from its native stablecoin, Linear USD (LUSD), causing its value to crash to zero. The attacker minted an unlimited supply of LAAVE tokens and exchanged them for LUSD on the Linear Exchange before selling the assets on PancakeSwap and Ascendex.
At the time of reporting, LUSD was trading at $0.97, showing a 2.52% increase from the previous day, with its trading volume surging by 7760.74% to $1.78 million. However, the coin experienced an intraday low of $0.9 due to security concerns.
To mitigate the damage, Linear Finance has taken several immediate actions, including pausing all protocol contracts enabling token minting, burning, or exchanging; disabling the Linear Bridge contract for LUSD; engaging a leading industry team to track down the attacker and bring them to justice; and sharing information about wallets involved in the exploit with major exchanges and authorities. The project's team is actively investigating the situation and has cautioned users against buying or trading LUSD until security is confirmed. Liquidations have been temporarily halted to safeguard user accounts during this challenging period.
