Decentralized Finance platform Wormhole hacked for over $320 million

Popular decentralized finance website, Wormhole, was made the victim of a cyberattack that cost over $320 million.

The hack is now known as the fourth-largest crypto heist on record as it shook the DeFi sector to its core. London-based blockchain analysis firm, Elliptic stated that the attackers fraudulently created wEtH tokens. They then report that 94,000 of these were transferred to the Ethereum blockchain.

Wormhole responded to the attack on social media where they claim that it had fixed their website’s vulnerability issues but is still working to get the network back up.

“The $320 million hack on Wormhole Bridge highlights the growing trend of attacks against blockchains protocols,” CertiK co-founder Ronghui Gu told CNBC. “This attack is sounding the alarms of growing concern around security on the blockchain,” he added. CertiK is a blockchain cybersecurity firm studying the recent Wormhole incident.

Decentralized Finance (DeFi) platforms allow users to lend, borrow, and save cryptocurrency while bypassing traditional gatekeepers of finance (i.e. banks). Due to these services, cash has poured into these sites as cryptocurrency itself has grown exponentially. Investors are drawn to these platforms as there is an almost guarantee of a high return on savings. However, this rapid growth also comes with the risk of security.

DeFi platforms have often been the subject of bugs in code and design flaws making them vulnerable to criminal activity as these sites hold deep pools of liquidity.

Reports of fraud and theft in DeFi sites surpassed $10 billion last year as the cryptocurrency industry remains relatively unregulated. Last August, the hackers behind the largest digital coin heist returned nearly all of the $610 million they stole from DeFi site Poly Network.

Previously, Tokyo-based platform Coincheck had $530 million stolen from their site while Mt. Gox, another crypto exchange, collapsed after hackers stole $500,000.

Source: Investopedia, Inquirer