Hackers have nabbed millions in decentralized finance (DeFi) protocol GMX’s native token from a whale that possessed large amounts of them. The cybercriminals seized 82,519 GMX tokens and exchanged them for a whopping 2,627 Ether. Then, they deployed the Hop Protocol and Across Protocol to shift their loot onto the Ethereum network.
Community members raise the alarm
On January 3, numerous community members spotted strange activity involving GMX tokens. In response to this, security firms CertiK and PeckShield declared it a breach in which $3.4 million worth of GMX tokens were stolen from a major holder (known as a whale).
The hack caused the token’s worth to plummet to just $38 before it quickly rebounded. As of now, its trading rate is at approximately $41. Naturally, this sizeable price drop sparked fear and alarm among users in the community; one user even tweeted:
As the hack’s impact was displayed through data, some community members commented about self-custody on social media. One Twitter user stated that this unfortunate event “underlines the risks of relying on self-custodial wallets.”
This is not the first time DeFi hackers strike
On January 1, a Bitcoin core developer lost his BTC to hackers, prompting many crypto community members to caution against self-custody of digital assets. They cited this incident as evidence that even a top developer was vulnerable and that ordinary people couldn’t avoid the same fate. The exploit highlighted the risks of keeping one’s cryptocurrency instead of using custodial services for security purposes.
During the holiday season, malicious DeFi hackers have been up to no good. On Christmas Day, they swiped an estimated $12 million in digital assets through a flash loan attack on Defrost Finance users. The day after, these cybercriminals managed to steal nearly $8 million from Bitkeep wallets with compromised APKs. It is clear that extra precautions need to be taken now more than ever when engaging in decentralized finance activities online.