The GMX exchange reported significant losses due to a hack amounting to approximately $42 million. This article discusses the details of the incident and its impact on the market.
Details of the GMX Hack
On-chain data indicated suspicious outflows from the GMX exchange, estimating losses of around $42 million. The exploit affected various markets, including WBTC, as well as bridged versions of USDC, USDT, LINK, UNI, and FRAX. The probable cause was a re-entrancy attack, leading to the minting of an abnormal amount of GLP tokens.
Method of Attack and Consequences
On-chain analysts suggest that the protocol was compromised through a malicious smart contract funded with mixed assets from Tornado Cash. Shortly after the incident, the GMX team contacted the hacker, offering a 10% white hat bounty. At this point, there has been no discussion on freezing USDC despite the hacker holding approximately $2.28 million in this token.
Market Impact and GMX's Future Plans
All funds were directed to a single wallet, holding over $32 million in Arbitrum-based assets and $9 million on Ethereum. Following the incident, the GMX token dropped over 10%, reaching a three-month low. The GMX exchange is evaluating next steps to protect its users and mitigate the crisis resulting from the hack.
The GMX hack highlights vulnerabilities present in most decentralized platforms and underscores the necessity of implementing more robust security measures to safeguard user funds.
