Osmosis crypto exchange is back in operation after unknown persons exploited a bug and stole $ 5 million

The chain of the decentralized cryptocurrency exchange Osmosis has been restarted on the Cosmos ecosystem after several days of offline mode. The developers managed to fix a bug that led to the drain of funds from the liquidity pool.

According to the development team, after a bug in Osmosis that «allowed liquidity providers to earn an additional 50% when adding and withdrawing liquidity,» the chain was stopped to avoid further damage to liquidity pools.

The bug itself was simple, and involved incorrect calculation of LP shares when adding and removing liquidity from pools.

It should have been caught. It was painfully overlooked in internal testing that was focused on more advanced functionality related to the upgrade.

— Osmosis 🧪 (@osmosiszone) June 8, 2022

Recently, hackers attacked a crypto exchange. First, a post by one of the programmers appeared on Reddit, pointing out a bug in the crypto exchange’s liquidity pool. It allowed withdrawing 50% more funds from Osmosis than were invested. And this operation could be carried out endlessly.

Twelve minutes after the record appeared, the crypto exchange shut down its blockchain. But at that point, $ 5 million had been withdrawn from the exchange by six unknown persons. Two of them, who withdrew about $ 2 million, agreed to return the «stolen» funds.