In an advanced communication dated November 23, the prominent Ethereum-powered decentralized exchange (DEX) KyberSwap was hit by a malicious attack. The announcement revealed that the attackers compromised the KyberSwap Elastic Pools Liquidity Solution (EPLS) to heist around $48 million.
The Elastic pools enable the KyberSwap liquidity providers to select the most suitable price range and compare their yields.
KyberSwap Hit by Malicious Attack
The hacking incident was first reported by an X user, Spreek, who observed a suspicious movement of funds. Updating the X community, Spreek observed that the hacker moved funds from KyberSwap digital wallets to a single wallet.
The funds were channeled through multiple networks to an address owned by the criminals. Immediately after discovering the attack, Spreek reported the matter to KyberSwap.
Cyber Criminals Teases KyberSwap After the $48M Attack
In retaliation for the security breach, the KyberSwap team advised the customers to withdraw their funds. The DEX firm admitted that KyberSwap has commenced the investigation process and will update the customers regularly.
The firm urged the customers to remain calm and to give KyberSwap maximum cooperation during the downtime. The KyberSwap hacking incident attracted the attention of on-chain investigators to assess the nature and the implications of the hacking incident.
After examining the on-chain data, the probing team noted that hackers compromised the KyberSwap elastic pools to drain tokens worth $20 million on Arbitrum, $15 million on Optimism, and around $7 million on the Ethereum network.
The exploit resulted in loss of significant assets in Ether (ETH), stablecoins, and wrapped tokens, among others. A recent update from the blockchain investigators revealed that KyberSwap suffered from a bug in its DEX approval authorization code.
KNC Market Outlook
The attack has left the KyberSwap team in a devastating situation as the company counts on the financial losses. In subsequent reports, the KyberSwap received a message from a team purporting to be the mastermind behind the multi-million exploit.
In the statement, the attackers assured the KyberSwap that negotiations would start soon. The attacker stated that as soon as he fully rested, he might engage the DEX platform for intense negotiations. Following the hacking incident, the KyberSwap native token KNC established a bearish trend to trade at $0.7255, a 2.53% decrease daily.
After failing to reverse its bearish momentum, the KNC investors became cynical about the token that triggered a dramatic selling pressure.According to CoinMarketCap, KNC’s daily trading volume increased by 166% to reach $61 million daily.