Possible Exploit Prompts Trading Suspension at DEX LeetSwap

Possible Exploit Prompts Trading Suspension at DEX LeetSwap

Time Stamp: August 1, 2023 8:03 AM
Source Node: 2797725

Security experts believe that LeetSwap lost over $630,000.

LeetSwap, a leading decentralized exchange (DEX) operating on Coinbase’s Base network, has temporarily halted all trading activities. This unprecedented step was taken in response to suspicions of a potential exploit within their system. 

On August 1st, LeetSwap took to X to voice their fears that some of their liquidity pools might have been compromised.

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Not wanting to take any chances, the company decided to suspend trading while they conducted a thorough investigation. This proactive measure, they hope, will prevent any further potential damage.

In a follow-up statement, LeetSwap reported that they had enlisted the help of on-chain security specialists to recover any locked liquidity.

While LeetSwap has been somewhat reticent to share the nitty-gritty details of the exploit, some eagle-eyed members of the blockchain community have offered their insights. Among them is Igor Igamberdiev, the head of research at algorithmic market maker Wintermute.

Igamberdiev believes that the exploiter made use of an exposed smart contract function. This, in theory, could have inflated the price of a token, thus making it possible for the attacker to drain LeetSwap’s liquidity pools of wrapped Ether (ETH).

Backing up Igamberdiev’s assertions, several blockchain security firms, such as PeckShield, Beosin, BlockSec, and CertiK, independently tweeted their confirmations of his theory and the amount exploited. They agreed that the attacker appeared to have walked away with a hefty 342.5 ETH, which equates to over $630,000.

The DEX has since released another update, stating that they are working diligently with the security experts to restore the liquidity that remains locked on their platform.

It’s worth noting that this is the second controversy in a single day involving Base. Earlier, the developer of a Brian Armstrong-themed memecoin called BALD withdrew liquidity for the token, which caused its price to plummet. The move drew accusations of an exit scam, an allegation that the project developer strongly refuted.

Gile is a Market Sentiment Analyst who understands what public events may form what emotions. Her experience researching Web3 news and public market messages – including cryptocurrency news reports, PRs, and social network streams – is critical to her role in helping lead the Crypto News Editorial Team.
As an intelligent professional in public relations, together with the team, she aims to determine real VS fake news patterns, and bring her findings to anyone searching for unbiased news and events happening in the FinTech markets. Her expertise is uncovering the latest trustworthy & informative Web3 announcements to the masses.
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