Coinbase-backed Nomad Protocol Suffered $150 Million Hacking Attack
Attacks on crypto platforms are becoming a reoccurring theme in recent weeks, as the Nomad Protocol is the latest to suffer an exploit.
The Coinbase on-chain platform was hacked on Monday, with reports indicating that close to $150 million was lost in the latest attack.
After confirming the exploit, the on-chain blockchain protocol informed its users of the incident. The firm also cautioned users to be wary of impersonators who might try to take advantage of the situation by posing as Nomad’s team.
According to the network, it is aware of attempts by impersonators to convince unsuspecting victims to move their assets to another address for safekeeping.
Nomad has yet to issue instructions on this and has urged users to disregard communications from channels other than the official site. All transactions have been disabled pending the conclusion of the investigation.
How the Exploit Happened
The attack happened after a suspicious transaction was observed where the exploiter removed 100 wrapped Bitcoin (WBTC) worth $2.3 million from the on-chain platform. However, WBTC was not the only token taken from the bridge.
Others include Wrapped Ether (WITH), USD Coin (USDC), Dai (DAI), GeroWallet (GERO), Frax (FRAX), and others.
Meanwhile, the latest exploit appears different from other attacks that have taken place this year. In the current hacking event, hundreds of accounts are beneficiaries of the exploit.
The said accounts received tokens directly from the Nomad bridge, which is unprecedented in the crypto industry. Moreover, the pattern used by exploiters to move tokens is also different from previous hacking incidents.
The hacker removed the tokens from the bridge in the same denominations and frequency. The attackers processed over 200 transactions during the same period.
Increasing Bridge Exploits
Over the past few years, attacks on blockchain bridges have become a common hacking incident. Investors have so far lost millions of dollars to bridges’ exploits, prompting calls for avoiding cross-chain funds transfers on bridges.
The multi-chain dimension has made bridges prone to attacks, as they have become a prime target of exploiters.
Vitalik Buterin, Ethereum’s co-founder, has also expressed concerns about using a bridge to transfer funds between different chains.
It is worth noting that bridges are classified as trustless and trusted, with both being susceptible to security breaches. However, there are ways to make them less prone to hackers and reduce their impact on blockchain projects.
There is a need for multi-dimensional cooperation between blockchain platforms as the Web3 ecosystem is a bonded space. As a result, blockchain protocols can work together to make the space secure for transactions and unhindered payment solutions.
Furthermore, coordination between DEXs and CEXs can easily track down any suspicious transactions between platforms processed by hackers.
Know-your-customer (KYC) verification is one of the most critical areas platforms can explore to reduce the rate and chance of exploits in the blockchain ecosystem.
More drastic actions are needed to stem the tide of exploits on bridges, which, unfortunately, is not an easy challenge to overcome.
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