Gym Network offers a “perfect workout for your tokens”, but has pushed itself to failure.
A recently introduced feature led to a loss of $2.1M from the project, crashing the price of GYMNET as the stolen tokens were sold off.
The project’s two audits were completed last month.
Why introduce new code so soon and risk an injury?
The BSC-based yield aggregator, built on top of Alpaca Finance, introduced a vulnerable “Claim and Pool” feature in its updated Single Pool Contract two days ago.
Peckshield states that:
The bug is due to the lack of caller verification, which is exploited to increase the balance without making any payment.
This allows the hacker to create fake deposits to the contract, which are processed despite the attacker not spending any coins. The hacker can then simply withdraw their balance of falsely credited deposits.
Exploiter’s address: 0xb2c035eee03b821cbe78644e5da8b8eaa711d2e5
Example exploit tx: 0x8432c1…
2k BNB (~$570k) sent to Tornado Cash
3k BNB (~$855k) remain on the exploiter’s BSC address
Gym Network was quick to confirm the source of the vulnerability, posting the following message in their Telegram group.
Although GYMNET dropped ~90% as the exploiter dumped the stolen tokens, it has since recovered to ~70% of its pre-hack price.
Why carry out two audits if you’re going to change the codebase a month later?
Was this the plan all along?
But the timing of this hack comes at a time when Binance itself is in the spotlight, with pressure coming from multiple fronts.
On Monday, it was reported that an SEC investigation is currently underway into whether the launch of BNB amounted to the sale of an unregistered security.
The same day, a Reuters hit-piece was published claiming that Binance is “a hub for hackers, fraudsters and drug traffickers”.
At a time when critics are feeling vindicated by the collapse of Luna and UST, the narrative that crypto is only for dirty money is an tempting one for mainstream media outlets to push.
However, Binance have published email transcripts showing a lack of willingness to cooperate on the part of the Reuters’ journalists who neglected to share the information necessary for the Binance team to investigate their claims.
While the markets are down and bear-market apathy takes over, it’s clear that those who disapprove of crypto are making their moves.
Ape season is well and truly over, and FUD season is in full swing.
But amongst all the doom and gloom, it’s important to remember that this is not our first rodeo…
Progress will not be linear. There will be hurdles; restrictions, scams and market crashes.
After all... no pain, no gain.
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