KyberSwap Falls Victim to Major Security Breach: $46 Million in Crypto Assets Lost

KyberSwap, a leading decentralized exchange (DEX) and liquidity provider, recently suffered a severe security breach, resulting in a substantial loss of approximately $46 million in cryptocurrency assets. This attack specifically targeted KyberSwap Elastic, a key component of the KyberSwap platform known for its advanced liquidity protocols and yield optimization strategies. As a result of the breach, there was a significant reduction in the platform’s total value locked (TVL), which sparked widespread concern within the decentralized finance (DeFi) community.

Prior to the attack, KyberSwap’s TVL stood at approximately $85 million. However, following the incident, this figure plummeted by nearly 70%, dropping to around $14 million. As of the latest data from DeFiLlama, KyberSwap’s TVL is currently at $13.61 million, underscoring the substantial impact of the exploit.

The breach saw the attacker siphoning off around $46 million in various cryptocurrencies, including significant amounts from Ethereum, Arbitrum, and Optimism networks. According to data from Wu Blockchain, the stolen funds were distributed as follows: $7 million on Ethereum, $20.7 million on Arbitrum, $15 million on Optimism, $3 million on Polygon, and an additional $2 million in Base.

In a bold move, the hacker left on-chain messages, suggesting a willingness to negotiate with KyberSwap’s team. This unusual tactic of communication by the attacker has been noted as part of a growing trend in DeFi exploits. Data analytics platform Lookonchain highlighted this via a tweet, stating:

KyberSwap quickly reacted to the breach, advising its users to promptly withdraw their funds for safety. Additionally, the platform assured that its DEX aggregator feature was not impacted and continues to function as usual. This clarification is important for both users and investors, as it pinpoints the exact part of the protocol that was compromised in the attack.

Following the security breach at KyberSwap, its effects rippled through the wider cryptocurrency market. The value of Kyber Network Crystal (KNC) tokens witnessed a temporary decline, highlighting the market’s reactive nature to such events. At the time of writing, Kyber Network Crystal v2 had decreased by 2.86% over the past day, with its price at $0.72. The trading volume for the token dramatically increased by 154.39% to $58.48 million compared to the previous day. The lowest price recorded for the crypto in the last 24 hours was $0.7202.