Hackers Exploit Crypto Market Dip to Snag “Discounted” Ethereum
A recent incident involving hackers exploiting the Nomad cross-chain bridge to steal $200 million has brought attention to the vulnerability of cryptocurrency markets. The hackers took advantage of the market crash to make significant purchases of ETH, as reported by on-chain analytics firm Lookonchain. Data reveals that the exploiters used $39.75 million in DAI stablecoin to acquire 16,892 ETH during this turbulent period.
The price of Ethereum experienced a sharp decline of 20% on Monday, dropping below $2,300, a level not seen since February. This downturn in Ethereum’s value coincided with a 17% decrease in the global cryptocurrency market capitalization, which stood at $1.79 trillion over the past 24 hours.
Further insights into the exploit were provided by blockchain security firm PeckShield, which uncovered that the hackers had moved approximately 2,400 ETH, equivalent to around $7 million, to Tornado.Cash. This service allows for the mixing of cryptocurrencies to obscure the origin of funds, complicating efforts to trace the stolen assets.
The breach of the Nomad cross-chain bridge occurred on August 2, 2022, resulting in the unauthorized transfer of $200 million. Sam CZ Sun, a researcher at Paradigm, highlighted on X that the breach stemmed from a flaw in the bridge’s smart contract. Exploiting this vulnerability, the hackers systematically drained the bridge’s funds through multiple transactions.
PeckShield also noted the movement of funds by other exploiters in the aftermath of the breach. The security firm shared that an exploiter associated with PancakeBunny swiftly converted $7.8 million in DAI to 2.922K ETH as the market experienced a downturn. This opportunistic move echoes past incidents, such as the flash loan attack on PancakeBunny’s Bunny Protocol on May 19, 2021, which resulted in a $45 million exploit.
The recent exploitation of the Nomad cross-chain bridge serves as a stark reminder of the risks inherent in the cryptocurrency ecosystem. As hackers continue to target vulnerabilities in smart contracts and market fluctuations create opportunities for illicit activities, the need for robust security measures and vigilant oversight remains paramount in safeguarding digital assets.
