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Multichain says $1.4 million in crypto siphoned from users in a cyber attack

Multichain is asking users to take matters into their own hands in the face of a $1.34 million exploit.

By: Tech Desk | Pune |
Updated: January 19, 2022 4:33:07 pm
Cyptocurrencies do give a high rate of returns, but are equally susceptible to cyber attacks. (Photo Credit: Pixabay)

Atleast $1.41 million (Rs 10 crore approx.) has been mooched off by cyber criminals due to a “critical vulnerability” in one of the largest crypto token swapping platforms in the world, Multichain, formerly known as Anyswap. This development comes at a time when the security ecosystem around decentralised finance (DeFi) is being questioned, with billions of dollars worth of cryptocurrency stolen from DeFi platforms in 2021 alone.

For the uninitiated, DeFi is an alternative finance ecosystem where consumers transfer, trade, borrow and lend cryptocurrency, independently of traditional financial institutions and the regulatory structures that have been built around banking. The DeFi movement aims to “disintermediate” finance, using computer code to eliminate the need for trust and middlemen from transactions.

Multichain is asking users to take matters into their own hands in the face of a $1.34 million exploit. “If you have got a problem, you have to fix it on your own,” according to the company.

While the coin swapping platform said that it has fixed the vulnerability, however, by ‘fixing’ it, the company meant that users will have to manually login into their account and remove approvals of six tokens on its platform including Wrapped Ethereum (WETH), PERI Finance (PERI), Mars Token (OMT), Wrapped BNB (WBNB), Polygon (MATIC), and Avalanche (AVAX).

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It should be noted that the vulnerability was first detected by a security firm called Dedaub and was reported to the Multichain team, according to a report by Cointelegraph. Hackers are still exploiting the vulnerability to gain access to users’ funds. At the time of writing, Multichain reports that a total of $1,412,274.25 is affected.

Meanwhile, DeFi transaction volume spiked to 912 per cent in 2021, according to Chainalysis stats. “DeFi is one of the most exciting areas of the wider cryptocurrency ecosystem, presenting huge opportunities to entrepreneurs and cryptocurrency users alike,” Chainalysis wrote in its annual Crypto Crime report. “But DeFi is unlikely to realize its full potential if the same decentralization that makes it so dynamic also allows for widespread scamming and theft.”

As of early 2022, Chainalysis said illicit address already hold over $10 billion worth of cryptocurrencies, with the majority of this held by wallets associated with cryptocurrency theft.

It should be noted that the rise in decentralized finance (DeFi) which facilitates crypto-denominated lending outside traditional banking, has been a big factor in the increase in stolen funds and scams in 2021. Hackers have targeted DeFis the most, in yet another warning for those dabbling in this emerging segment of the crypto industry.

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