Solana DeFi protocol Loopscale hacked for $5.8M

Solana DeFi protocol Loopscale lost over $5.8 million, roughly 12% of its Total Value Locked (TVL), to a cyber exploit. 

The platform is still investigating how the attack happened, trying to identify the hackers involved and how they can retrieve the stolen funds. They are currently coordinating with law enforcement and security personnel to resolve the situation quickly.

In an X post, the platform briefed its users on what it believes to be the main cause of the attack. Loopscale remarked, “The root cause of the exploit has been identified as an isolated issue with Loopscale’s pricing of RateX-based collateral. There is no issue with RateX itself related to this. Loss of funds explicitly affects depositors to SOL and USDC Genesis vaults.”

Loopscale allows some functions while restricting others

Attackers manipulated the RateX PT token pricing functions, draining 1200 SOL and $5.7 million USDC from the platform’s vaults. 

Soon after the attack, Loopscale closed off its markets temporarily. However, after a few hours, the protocol reactivated loan repayments, top-ups, and loop closing, while other application functions, like vault withdrawals, remained restricted.

The attack mostly affects Loopscale USDC and SOL vault depositors, not necessarily borrowers or loopers on the platform. However, Loopscale has promised to reveal how many users were specifically affected, how holders will withdraw from their vaults, and a technical post-mortem.

Before the attack, OShield, which audited the protocol in January and February of this year, identified several vulnerabilities. The project later posted on its FAQ that all high-risk issues had been resolved. Currently, there is still an ongoing audit by Sec3 on the protocol.

Loopscale, only launched two years ago, on April 10, introduced a unique order book-based lending model to structure modular loans, providing more predictable terms and minimizing rate volatility. The protocol features fixed-rate, fixed-duration, and multi-asset borrowing, earning the support of major crypto companies like CoinFund, Jump Capital, and Solana Ventures.

In 2021, the project, then called Bridgesplit, a proposed NFT yield product, secured about $4.25 million in VC funding from Solana Labs, Coinbase Ventures, and others.

The crypto industry has lost billions of dollars to exploits since the start of 2025

A price manipulation on Oracle earlier this month led to the loss of $7 million for KiloEX. The platform is still planning to compensate affected users based on their resume time.

The perpetual futures DEX, however, said that only trades that stayed open throughout the platform’s 10-day pause would be eligible for compensation. Moreover, per a Thursday blog post, participants were advised to close positions once KiloEX resumes to receive full value.

Aside from the KiloEX attack, Bybit was hacked for $1.46 billion in February. The attack beats all previous record hacks, including Coincheck’s 2018 hack, when they lost $534 million, and Mt. Gox’s 2014 hack, with $470 million drained.

North Korea’s Lazarus group is suspected of hacking Bybit after the exchange announced they traced the attack to malicious JavaScript code served from a compromised Safe AWS S3 bucket and claimed the breach originated outside its platform.

As of Q1 2025, over $1.6 billion was lost in DeFi attacks. Platforms like zkLend, Ionic Money, Cardex, Four.Meme, Cashverse, BankX, and GoldReserve NFT have seen their funds drained. In February alone, the crypto industry had lost over $1.53 billion in 9 attacks, a 20% surge from January and an 18x increase from February 2024.