Decentralized protocol OnyxDAO suffered a major security breach when hackers withdrew $3.2 million from their wallets. This incident, in addition to the recent increasing attacks in the crypto market, increased the sensitivity among users to always be prepared for the risk of hacking. Hundreds of cryptocurrency protocols and tens of thousands of investors are hacked every year. The total extent of losses reaches billions of dollars.
Details of the OnyxDAO Hack Incident
OnyxDAO faced a loss of $3.2 million as a result of a security breach detected by PeckShield. On-chain data shows that the attackers are in possession of a large amount of VUSD and the funds are being moved between various platforms. The attacker currently has approximately 521 ETH.
“Looks like today’s victim is OnyxDAO (with a loss of >$3.8 million). They fell victim to a known code vulnerability in the forked CompoundV2 codebase. Stolen assets include 4.1 million VUSD, 7.35 million XCN, 5 thousand DAI, 0.23 WBTC, 50 thousand USDT.”
It is stated that the OnyxDAO incident was caused by a sensitivity issue in the CompoundV2 code base and that this bug was used to cause loss of funds by manipulating exchange rates. This incident also reveals that decentralized protocols are still absurdly reluctant to audit code. It is a great negligence that a vulnerability that was already detected in the past was not checked in the forked protocol. Protocol developers and team leaders do not allow white hackers to perform the necessary tests and audits in order to avoid code audit fees exceeding 10-15 thousand dollars. In the end, those who use the protocol pay the price hundreds of times more.
Increasing Security Threats in the Crypto Market
While phishing attacks and hyperlink hacks are among the frequently used methods, other platforms continue to face varying degrees of security breaches. Recently, platforms such as Ethena Labs had to pause their activities as a result of attacks on the internet domain.
Attacks similar to the OnyxDAO incident have led to increased regulators’ anger towards the crypto market. However, regulators have not yet taken concrete steps regarding penetration testing requirements. If the SEC had gotten rid of the securities or value discussions and forced the protocols and cryptocurrency exchanges, together with other relevant institutions, to detect security vulnerabilities, billions of dollars of losses would not have been placed on the shoulders of investors today.
In this context, increasing security measures in the crypto market and carrying out balanced regulatory efforts seem to be of critical importance in preventing similar incidents in the future.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that crypto currencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
