Upbit Stops CRV Withdrawal as Curve Finance Loses Millions of Dollars to Exploit

Upbit Stops CRV Withdrawal as Curve Finance Loses Millions of Dollars to Exploit

Upbit, a
South Korean cryptocurrency exchange, has temporarily suspended deposits and
withdrawals of CRV, the governance token of Curve Finance, a decentralized
exchange for stablecoins. The move comes as hackers over the weekend exploited
a ‘re-entrancy’ bug in Vyper to steal millions of dollars.

Curve Suffers Hack

Reentrancy
is a type of vulnerability in smart contracts that enables attackers to make
repeated calls to a protocol, creating the opportunity to
steal funds from such smart
contracts or execute other
malicious actions. On the other hand, Vyper is a Python-like language for the
Ethereum Virtual Machine (EVM), which is a software that runs on Ethereum and
handles the blockchain’s smart contracts system.

In an
announcement released today (Monday), Upbit explained
that it took the decision to halt the withdrawal of CRV in order “to ensure the
safety of digital asset transactions.”

“Today,
certain vulnerabilities have been discovered in some of the stablecoin pools
associated with Curve (CRV). As a result, CRV is currently experiencing
significant volatility. We advise exercising caution when considering any
investments related to CRV,” Upbit stated.

Vyper announced
the exploit earlier yesterday (Sunday), noting that certain versions of its language
were vulnerable to ‘malfunctioning reentrancy locks’. Curve Finance also
followed up with an
update, saying the event affected 'a number of
stable pools’.

According
to Cointelegraph, Michael Egorov, Curve Finance’s CEO confirmed through a
Telegram Channel that 32 million CRV tokens worth over $22 million were stolen.
However, BlockSec, a smart contracts audit platform, puts the figure at over
$41 million.

Furthermore, Huobi Global estimated that losses from the attack were up to $52 million. The Seychelles-based crypto exchange added that it was closely monitoring the situation.

Crypto Hack
Losses Surge YTD

Meanwhile,
Finance Magnates reported that the amount of money lost through hacks and
exploits in the cryptocurrency sector surged to the highest level
year-to-date in July 2023. This is even as hackers stole $313
million through
different kinds of scams and malicious exploits during the second quarter of
the year.

Speaking on
the hack at Curve, Zachary Townsend, Co-Founder and CEO of Meanwhile,
a provider of life insurance for the crypto economy, emphasized the importance
of audits in preventing such incidents.

“In any
case involving an exploit of crypto protocols, it’s important that audits are
conducted very early on and preferably before formal launch,” Townsend told
Finance Magnates. “Obviously, Curve is a reputable protocol and has a venerable
track record in the DeFi industry. But, again, this incident should serve as a
reminder that extensive testing and auditing are key.”

Also
commenting, Brian D. Evans, the CEO and Founder of BDE Ventures, a web3 venture
studio and advisory firm, noted that the most important thing going forward is to learn from the mistake, improve and do the utmost to ensure that such exploits never happen
again. Evans, however, pointed out that the sophistication and complexity of
the DeFi ecosystem offer no 100% guarantee.

“The fact
that all these protocols are composable with each other elevates the risk that
an exploit in one protocol can quickly cascade into the other protocols,
heightening the risk of mass liquidation events,” the BDE Ventures’ CEO stated. “Even the most
sophisticated of audits aren’t going to catch everything or be able to
future-proof all protocols.”

New Zealand’s FMI standards; ICE delists Bakkt’s contracts; read today’s news nuggets.

This article was written by Solomon Oladipupo at www.financemagnates.com.

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