Researchers Disable $10M Backdoor Exploit in DeFi Space
In a major win for the crypto community, security researchers found and disabled a backdoor exploit in decentralized finance (DeFi) protocols that exposed over $10 million of cryptocurrency. The attack, targeting a multitude of smart contracts, is suspected to be linked with North Korea’s Lazarus Group due to its sophistication and large-scale deployment.
Exploit Targeted Uninitialized ERC-1967 Proxy Contracts
The bug was discovered by the Venn Network’s anonymous researcher Deeberiroz, who tweeted the news on Thursday. The bug targeted uninitialized ERC-1967 proxy contracts, allowing attackers to seize contracts before they were fully deployed. The backdoor was not discovered for months, quietly threatening the ecosystem.
36-Hour Rescue Operation Foils Attack
After the bug had been discovered on Tuesday, Venn Network launched a 36-hour rescue operation involving a team of various developers and security experts, including Pcaversaccio, Dedaub, and Seal 911. By their collaborative efforts, vulnerable funds were protected, and the possible theft of millions was prevented.
According to Venn Network’s Or Dadosh, the malicious implementations were inserted by the hacker when deploying the contracts, allowing hijacking of the contracts unbeknownst. The backdoor was designed to kick in only after the contract had been initiated, making any malicious activity almost untraceable.
Berachain and Other DeFi Protocols Secure Assets
The Berachain team, one of the protocols targeted, responded quickly by freezing the exploit contract and transferring its balance to a fresh secure contract. The quick response saved no user funds. Other DeFi protocols also secured their assets, with most responding just in time to prevent attacks.
Suspected Lazarus Group Involvement
David Benchimol, a Venn Network security researcher, believes the attack can have been conducted by the Lazarus Group, a notorious North Korean hacking group. Benchimol saw the sophistication of the attack and its deployment on all Ethereum Virtual Machine (EVM) chains as an indication of the attack being organized, although he emphasized no clear endorsement bringing together Lazarus and the exploit.
Conclusion
Though the assault was thwarted effectively, the magnitude and surreptitious nature of the operation have become a point of concern regarding the sustained security threats in DeFi systems. With millions of dollars hanging in the balance, this incident serves to underscore the necessity of ongoing caution as well as enhanced security in smart contract development and deployment.
