In a significant cybersecurity incident, the LI.FI Protocol, a cross-chain bridging and swapping platform, suffered a sophisticated attack resulting in the theft of approximately $9.7 million in various cryptocurrencies. The breach primarily impacted users who had set infinite approvals on specific contracts within the protocol. The attack was first detected when LI.FI Protocol issued an urgent warning to its users, advising them to avoid interacting with any LI.FI-powered applications while the team investigated the potential exploit. Security firms and blockchain analysts quickly confirmed the breach, with Cyvers Alerts reporting suspicious transactions involving LI.FI Protocol across multiple chains.
A user identified as Sudo was the first to report a possible exploit on social media, highlighting that nearly $10 million had been drained from the protocol. Security experts later identified several vulnerabilities that the attackers had exploited. Among these were infinite approvals, where users had manually set unlimited permissions for certain contracts, and a technique known as call injection, where attackers manipulate function calls to execute unauthorized actions. The exploit also revealed a cross-chain vulnerability, affecting multiple blockchain networks, including Ethereum and Arbitrum, underscoring the complexity of securing cross-chain protocols.
The stolen funds primarily consisted of stablecoins such as USDC and USDT, which the attackers swiftly converted to Ethereum (ETH). On-chain data indicated that the wallet containing the stolen funds held 1,715 ETH, worth approximately $5.8 million, along with various stablecoins. The rapid conversion and movement of these funds highlight the attackers’ intent to obfuscate the stolen assets’ trail and their expertise in exploiting the vulnerabilities within the LI.FI Protocol.
In response to the attack, LI.FI Protocol has urged its users to take immediate action to secure their assets. The protocol advised users to refrain from interacting with any LI.FI-powered applications and provided specific contract addresses for which users should revoke all approvals. Additionally, users who had interacted with the protocol on affected chains were strongly encouraged to take immediate steps to secure their assets and mitigate any further risks. This incident serves as a stark reminder of the ongoing challenges in securing cross-chain protocols and the need for continuous vigilance and robust security measures in the rapidly evolving blockchain ecosystem.
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