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ChainSwap Loses $8 Million In Second Exploit

Other 2021/07/14 01:00 by Best Owie

ChainSwap has experienced another exploit in what has turned out to be a terrifying month for the exchange. The platform which acts as a bridge for assets had succumbed to an exploit earlier this month, and now, only eight days later, ChainSwap has succumbed to another exploit. This time, the attacker made away with $8 million before it was shut down.

The attack was carried out using the token ASAP, affecting a wide variety of tokens and projects in the process. The ChainSwap team had taken to Twitter to warn their users to not purchase the platform’s native ASAP token for the time being while the team carried out their investigation into the hack.

Related Reading | Ledger Scam: Scammers Mail Hacked Ledger Devices To Steal Crypto

The exploit led to some coins like WILD losing almost all of their value, before promptly recovering back up. The price of WILD had fallen 99.8 percent following the attack but the price has since recovered.

This attack comes on the heels of the first exploit on ChainSwap eight days earlier which had seen the attacker make away with $800,000 in the hack. The ChainSwap team had given a post-mortem report on the attack but there is yet to be a follow-up on that attack.

What Is ChainSwap?

ChainSwap is a cross-chain bridge that acts as an intermediary for multiple chains. The bridge supports the Ethereum network, MATIC, and the Binance Smart Chain. A cross-chain swap enables the trading of tokens by users without the need for an intermediary or a third party like exchanges.

ChainSwap enables holders to trade coins from different blockchains without having to go through an exchange like Binance. For example, a holder can trade their coins that are on the Ethereum blockchain for coins that are on the Binance Smart Chain without ever needing to deposit their coins in an exchange. This means that traders can trade a variety of coins in one go no matter what blockchain their coins or tokens are based on.

Total DeFi market cap from TradingView.com

Total DeFi market cap above $60 billion | Source: Crypto Total DeFi Market Cap on TradingView.com

This also means that coins that are not listed on any exchanges can be traded on ChainSwap. Smaller projects which are just starting out are traded by holders for other coins on cross-chain bridges all the time and it has become a very popular way of trading coins in the market.

Given this, there are a lot of small projects and tokens on ChainSwap, and those projects have been affected following the second hack.

Token Projects Suffer In Second Hack

Several projects took to their official accounts to announce how the ChainSwap hack had affected their tokens and their projects. The hack which affected a lot of projects included Wilder World, Nord, Razor, Antimatter, and a host of other coins which had seen their projects take hits from the exploit.

Projects like ROOM announced that they had seen a $550,000 loss from the attack and had to make a quick decision to pull all liquidity.

Related Reading | How Hackers Looted 2600 ETH In Rari Capital Cross-Chain Exploit

The Umbrella Network (UMB) also announced that they planned to buy back $230,000 worth of UMB tokens and would leave it up to the community to decide what would be done with the tokens. Umbrella Network also said that it would be pulling from ChainSwap and will no longer rely on the decentralized finance platform for token bridging.

The ChainSwap team announced after the hack that they had frozen the Binance Smart Chain mapping token address in order to identify the addresses of the attackers. ChainSwap has assured its users that their tokens are safe, although send and withdrawal functions have been suspended for the time being.

The price of ASAP saw a sharp decrease in its price following the hack. But the price has since recovered. Although the ETH-BSC bridge remains paused at the moment.

Featured image from Epiq, chart from TradingView.com

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