DeFi project Beanstalk Farms has lost $182 million after a hacker attack

    19 Apr 2022

    Credit-based stablecoin DeFi protocol Beanstalk Farms built on Ethereum has lost $182 million as a result of a flash loan attack on Sunday. As Bloomberg reported, the hacker got away with $80 million in crypto tokens.

    The hacker got away with $80 million that was funneled through Tornado Cash, a cryptocurrency mixer protocol allowing private transactions, said Bloomberg, citing security firm PeckShield.

    The attacker obtained 24,830 ETH – roughly $75.8 million. The remainder of the stolen funds were in the form of drained liquidity connected to the protocol’s governance token.

    A flash loan attack occurs when the borrower manipulates the markets as the loan is taking place, driving the value of the borrowed token underwater thanks to excess slippage, and then allowing the attacker to buy back the token at a deflated price.

    Following the incident, the project’s native token – also referred to as BEAN – plunged 75% from its $1 peg against the dollar.

    Upon revealing their identities, the founders of the protocol emphasized that they had nothing to do with the attack.

    “Like all other investors in Beanstalk, we lost all of our deposited assets in the Silo, which was substantial,” the creators said, according to Bloomberg.

    It is yet to be disclosed if investors who lost their funds will be reimbursed.

    Meanwhile, Tornado Cash’s use by hackers has given rise to criticism for its lack of effort in preventing fraud. The ETH mixer recently said it is using the Chainanalysis Oracle contract to block addresses sanctioned by the Office of Foreign Assets Control (OFAC) from using its services.

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