Flash Loan Attack Depletes $2.2 Million from Platypus

Flash Loan Attack Depletes $2.2 Million from Platypus

Time Stamp: October 12, 2023 7:16 AM
Source Node: 2937223

Platypus DeFi hit with yet another multi-million dollar flash loan exploit.

The DeFi protocol Platypus is grappling with losing over $2 million in assets due to a series of flash loan exploits. The protocol has temporarily halted all trading pools in response to the incident.

Security analytics provider CertiK reports that Platypus fell victim to three successive flash loan attacks on October 12. The first exploit drained $1.2 million, the second siphoned off $575,000, and a third one followed within a minute, resulting in a loss of $450,000. The total loss across these attacks stands at $2.23 million.

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Operating as an automated market maker (AMM), Platypus enables seamless trading of digital assets using liquidity pools. Platypus had initially raised $3.3 million in funding last year, spearheaded by the now-insolvent Three Arrows Capital.

The attacks exploited a specific vulnerability in the Platypus platform. During a flash loan exploit, attackers took advantage of a loophole, allowing them to borrow cryptocurrency instantaneously without needing collateral.

CertiK’s records show that this is not the first time the protocol has faced such an issue; there were two previous flash loan attacks earlier this year. The first, which took place on February 16, resulted in a loss of $8.5 million and caused the value of the Platypus USD stablecoin to plummet from $1 to $0.48. A second attack in July caused a loss of approximately $157,000.

To address the fallout from the earlier attacks, Platypus launched a compensation website in March. This online platform was designed to help users assess the compensation owed to them and provide a channel for them to voice any related concerns prior to the disbursement of funds.

The recent flash loan exploits against Platypus mark a troubling trend for the DeFi platform, which had already been hit by similar attacks earlier this year. As Platypus moves to strengthen its security measures, it remains to be seen how the platform will recover and compensate its users this time around.

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