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Infrastructure Protocol Hedgey Incurs $45 Million Loss in Cyberattack

2 mins
Updated by Ryan James
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In Brief

  • Hedgey Finance suffers $45 million loss in cyberattack.
  • Attacker exploits 'createLockedCampaign' function using flash loans.
  • Incident highlights vulnerability in DeFi protocols, underscores need for enhanced security measures.
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Hedgey Finance, a notable infrastructure protocol, has fallen victim to a sophisticated cyberattack. This has resulted in a significant financial loss. So far, estimated at approximately $45 million.

The breach unfolded over a two-hour period. The hacker exploited the protocol’s ‘createLockedCampaign’ function using flash-loaned funds across multiple blockchains, including Ethereum Arbitrum and Binance Smart Chain.

Flash Loan Exploit Drains $44.5 Million

The attacker managed to maneuver through Hedgey Finance’s digital defenses by executing transactions that siphoned off assets totaling around $44.5 million. Cyvers, a cybersecurity firm specializing in blockchain technology, initially detected this incident.

Despite attempts to alert the Hedgey Finance team through multiple channels, no immediate response was received from the protocol’s operators.

Read More: Crypto Scam Projects: How To Spot Fake Tokens

This breach highlights a critical vulnerability in the ‘createLockedCampaign’ function. The exploitation involved sophisticated maneuvers using flash loans—a type of uncollateralized loan used in decentralized finance (DeFi). These loans are increasingly becoming a tool for exploitation due to their ability to amass large amounts of capital within a single transaction block.

Cyvers noted on its X feed that a suspicious address linked to the breach had transferred significant sums to Bybit. The address in question also received funds from FixedFloat. Which is another cryptocurrency exchange. This suggests a possible laundering attempt following the initial theft.

The event underscores the escalating threats within the digital asset space. Especially as financial operations on blockchain platforms become more complex and intertwined. This attack not only sheds light on the technical vulnerabilities but also on the critical need for real-time monitoring and rapid response mechanisms within the crypto industry.

For Hedgey Finance and similar entities, this incident is a stark reminder of the importance of enhancing security measures, collaborating closely with cybersecurity experts, and maintaining vigilant oversight to safeguard digital assets against increasingly sophisticated cyber threats.

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Ryan James
Ryan Boltman is a dynamic and experienced professional with a rich background in marketing management, business development, and cryptocurrency journalism. With a BCOM in Marketing Management from the University of South Africa and an Honors in Business Management, Ryan has honed his expertise across multiple countries including South Africa, the USA, and the Netherlands. His career includes significant roles in customer success, sales management, and content creation within the blockchain...