Euler Finance suffers $197M DeFi hack
On March 14, Euler Finance updated its users on the situation and notified them of the disabled features. The firm stated that it works with various security groups to perform audits of its protocol, and the vulnerable code was reviewed and approved during an outside audit. However, the vulnerability remained on-chain for eight months until it was exploited, despite a $1 million bug bounty in place.
Sherlock, an audit group that has worked with Euler Finance in the past, verified the root cause of the exploit and helped Euler submit a claim. The audit protocol later voted on the claim for $4.5 million, which passed, and later executed a $3.3 million payout on March 14.
In its analysis report, the audit group noted a significant factor for the exploit: a missing health check in “donateToReserves,” a new function added in EIP-14. However, the protocol stressed that the attack was still technically possible even before EIP-14.
Sherlock noted that the Euler audit by WatchPug in July 2022 missed the critical vulnerability that eventually led to the exploit in March 2023. Euler has also reached out to leading on-chain analytic and blockchain security firms, such as TRM Labs, Chainalysis, and the broader ETH security community, in a bid to help them with the investigation and recover the funds.
Euler Finance has notified that they are also trying to contact those responsible for the attack in order to learn more about the issue and possibly negotiate a bounty to recover the stolen funds. The incident highlights the need for regular audits of DeFi protocols to detect vulnerabilities and prevent hacks. As DeFi continues to grow and attract more users, security and reliability will become even more critical for the industry’s success.
Binance faces investor backlash and Bitcoin withdrawals following CFTC lawsuit
Within 24 hours of the lawsuit announcement, investors withdrew over 3,400 BTC from Binance, anticipating market fluctuations and seeking to lessen the potential impact of a Binance shutdown. The move by investors led to a reduction in Binance’s total Bitcoin balance, which was reduced by over 3,900 BTC in the past week. In contrast, competing exchanges such as Coinbase, Bitfinex, and Gemini saw an increase in BTC reserves during the same 24-hour timeframe.
While CZ maintains that Binance does not trade for profit or manipulate the market, recent episodes involving other crypto entrepreneurs, such as FTX’s Sam Bankman-Fried and Terraform Labs’ Do Kwon, have shaken investor confidence in the cryptocurrency ecosystem.
It is also worth noting that Bitcoin balances on major crypto exchanges have declined since March 20, with nearly 27,000 BTC leaving these exchanges over the past week. The reasons behind this trend are not entirely clear, but it may be due to a combination of factors, including increasing regulatory scrutiny and concerns about the overall cryptocurrency market.
Alongside the CFTC’s lawsuit against Binance and CZ, a federal judge temporarily halted a proposed deal between Voyager and Binance.US. This move indicates that regulators are taking a closer look at the cryptocurrency industry and may be ramping up their efforts to enforce existing regulations and prevent fraudulent activities.
Overall, the recent events surrounding Binance and the wider cryptocurrency market have raised concerns among investors and regulators alike. While the long-term impact of these developments remains to be seen, it is clear that the cryptocurrency industry is facing increased scrutiny and may need to adapt to evolving regulatory requirements to continue its growth and development.
THORChain Pauses Network Amid Reports of Vulnerability
On March 28, THORChain announced that it had temporarily paused all trading due to reports of a potential vulnerability with a THORChain dependency that could impact the network. The decision was made as a precautionary measure while the reports were verified, according to THORChain. Social media reports had indicated that THORChain’s liquidity platform, Nine Realms, and its dedicated security team, THORSec, had received “credible reports” of a possible vulnerability affecting THORChain. As a result, the THORChain network was halted globally.
“Network preemptively paused by NO’s to investigate the report; updates will follow,” Nine Realms tweeted.
THORChain’s native token, Rune (RUNE), has dropped about 5% in value following the news, according to CoinGecko data. As of this writing, the token is trading at $1.32, down 18% over the past 30 days.
This is not the first time that THORChain has had to pause its network due to issues. In October 2022, the network was paused due to a software bug that caused “non-determinism between individual nodes.” After 20 hours of maintenance, the network was fully functional once again.
In 2021, THORChain also had to halt its network after suffering a breach, resulting in hackers stealing $7.6 million worth of cryptocurrency assets.
After about eight hours of the initial announcement, THORChain updated its Twitter account, stating that the vulnerability was credible but would require a malicious node in the last churn, which is when new nodes are added to the network. THORChain has resumed trading as no nodes can exploit the current vulnerability, according to the update.
In conclusion, THORChain’s temporary network pause due to a potential vulnerability serves as a reminder of the risks associated with decentralized protocols. While such protocols offer many benefits, they can also be susceptible to security vulnerabilities and breaches. THORChain’s quick response and resolution to the situation demonstrate the importance of having a dedicated security team and protocol in place to handle potential issues swiftly and efficiently.
Bitcoin Hash Rate Spikes to All-Time Highs
Sam Wouters, a research analyst at Bitcoin financial service provider River Financial, believes that the recent spike in hash rate is linked to the inventory of mining hardware that was brought online last year. He notes that while Bitcoin’s price was low, miners brought as much inventory online as possible, and the network reached maximum capacity. However, with the recent price surge and some time passing, more inventory has been able to go online, leading to the spike in hash rate.
Wouters also suggests that Hydro models are starting to enter the market, with “250+ TH/s per machine, which adds tremendous hash rate.” Similarly, a March 20 analysis from investment banking company Stifel shared a similar sentiment, speculating that miners are bringing hardware back online, which is leading to the increase in hash rate.
One company that is benefitting from the recent surge in hash rate is TeraWulf, a US-based Bitcoin mining company. According to its CEO, Ammar Khan, TeraWulf has been able to continue mining Bitcoin at lower price levels due to its efficient mining fleets. Khan explains that some have speculated that lower prices forced miners to shut down their rigs and wait for the BTC price to improve, but TeraWulf has been able to continue mining due to their low-cost energy sites.
Khan also notes that TeraWulf has the opportunity to expand its capacity by 80 MW at LMD and 50 MW at Nautilus. He believes that the recent price movement is an indication of the long-term value of the ability to expand at low-cost energy sites. However, he does not expect the network hash rate to continue to increase through the first half of the year, as there is a lag between when investment decisions are made and when that capacity comes online.
In conclusion, while the exact reason for the recent spike in hash rate is unclear, it is evident that Bitcoin mining is becoming increasingly profitable, and miners are taking advantage of the current market conditions. As more companies enter the market, and more inventory comes online, it will be interesting to see how the hash rate continues to evolve and how it impacts the price of Bitcoin.
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