Hackers steal $ 128 million from Balancer cryptocurrency exchange

The Balancer decentralized protocol has suffered a large-scale attack that resulted in the withdrawal of more than $ 128 million worth of digital assets from its liquidity pools. The incident was first reported by PeckShield analysts, who recorded a series of suspicious transactions and large transfers from official Balancer wallets to third-party addresses.

According to Etherscan, the attackers withdrew about 6587 WETH ($ 24.5 million), 6851 osETH ($ 26.9 million), and 4260 wstETH ($ 19.3 million). The total volume of transactions indicates a possible compromise of the protocol’s storages. The Balancer team confirmed the attack and said it is currently investigating to find out the source of the vulnerability.

«We are aware of a potential vulnerability affecting Balancer v2 pools. Our engineering and security teams are investigating the situation as a matter of priority. We will share verified updates as soon as we have more information,» the project said in an official statement.

Trading Strategy CEO Mikko Otamaa suggested that the incident could have been caused by an error in the logic of smart contract verification. According to him, the vulnerability may not have affected all versions of Balancer, but if it is present in old V2 forks, the total losses could exceed $ 110 million. PeckShield analysts clarified that the attack continues in other networks where the protocol works.

Balancer is a decentralized exchange and portfolio manager that has been allowing users to trade tokens and provide liquidity to pools with automatic balance since 2020. It is estimated that the protocol manages assets worth more than $ 350 million on the Ethereum network alone. Amid the news of the exploit, the BAL token price dropped by more than 4%, reflecting the market’s reaction to the loss of liquidity and growing concerns about the security of DeFi projects.