Cypher Protocol, a Solana-based futures DEX, was forced to suspend its smart contracts after a vulnerability resulted in losses of over $1 million.
Cause of the incident
Late last night, Cypher developers announced that they had suffered a “security incident” that required them to suspend their smart contracts until a post-mortem analysis could be performed. They also issued a call to the hacker, promising to discuss next steps if the bad guys would respond.
Cypher Protocol’s Twitter profile proudly spells out the exchange’s mission, which also drew a smile.
However, the irony doesn’t stop there. It turns out that the hack took place during mtnDAO, a hackathon co-hosted by Cypher Protocol and another Solana-based project, Marginfi.
It looks like we have a winner – albeit not by popular vote.
The exploit consumed more than 38,000 SOL tokens and over 123,000 USDC, for a total of $1,035,203 in illicit proceeds.
A rather confusing move for the hacker was to choose Binance and KuCoin for cashing out. By choosing large exchanges with strong cybersecurity teams rather than the well-known cryptocurrency mixer route, the hacker was at a much greater risk of being caught. However, it is also possible that the exploit was carried out as a temporary supplement to the hackathon. If the funds were to be returned, anonymity might not be that important to the exploiter.
Alternatively, the attack could have been carried out by someone in a country that does not cooperate with Western law enforcement, in which case easy access to the liquidity provided by large centralized exchanges might be the only thing that matters.
Engagement through NFTs
Since the attack, users have been trying to contact the hacker by sending NFTs with frivolous messages to the addresses in question.
Some of these messages are simple moral appeals.
“But seriously, you raised money with Binance and KuCoin and tried to get $30,000. People will find you. Please do the right thing and give me the rest.”
However, other users opted for the more succinct "Give it back to you you shit lord".
While the scale of the exploit pales in comparison to previous attacks on the Solana network, a hack of this magnitude could be a sink-or-swim deal for a smaller project like Cypher Protocol. It remains to be seen what developers will discover about the attack and whether recovery is possible.
