Balancer Protocol, a prominent decentralized finance platform on Ethereum, was reportedly hacked through a front-end attack, resulting in the loss of over $240,000. The exploit came into alert on Tuesday after Balancer issued a warning to its users.
“The balancer frontend is under an attack. The issue is currently under investigation. Please do NOT interact with the balancer UI until further notice!,” the Balancer team warned in a tweet.
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Still The Wild West
Frontend attacks are becoming increasingly common, as they can be difficult to detect and prevent. Attackers can exploit vulnerabilities in the website or application’s code, or they can use social engineering techniques to trick users into revealing their personal information or clicking on malicious links.
The attack exploited a vulnerability in the platform’s frontend code, which allowed the attacker to inject malicious code into the protocol’s domain. This contract was then able to steal users’ funds when they interacted with the platform.
While the team has taken steps to investigate and resolve the issue, the incident has raised concerns about the safety of the users’ funds. However, Blancer hasn’t provided further statements.
Blockchain analyst ZachXBT claimed that approximately $238,000 was stolen within the first 30 minutes of Balancer’s announcement. Although the loss remains unverified, it adds further concern to an already dire situation.
It is not the first time Balancer is under attack. On August 22, the project announced that it had suffered a major security breach, resulting in $1 million in losses a few days later. Balancer reported that smart contract vulnerability affected a number of V2 pools.
Regulators Are After DeFi
The DeFi sector has proliferated over the past year and attracted significant investments and users. However, the road to widespread adoption remains riddled with roadblocks, including the security measures of DeFi protocols.
Apart from security concerns and other vulnerabilities, the sector has been under regulatory radar, particularly the U.S. Securities and Exchange Commission (SEC).
David Hirsch, a member of the SEC who leads the Crypto Asset and Cyber Unit in the Division of Enforcement, recently warned that the securities agency is scrutinizing crypto exchanges and DeFi projects that may violate securities laws.
The executive said at the Securities Enforcement Forum Central in Chicago that Binance and Coinbase are not the only entities under SEC scrutiny. He added that the agency’s expanding scope of concern now encompasses a wide array of actors within the financial landscape, including brokers, dealers, clearing agencies, and any other entities that fall under its regulatory purview.
Since the beginning of 2023, the US securities watchdogs have made headlines by filing consecutive lawsuits against major cryptocurrency exchanges, Coinbase and Binance. These lawsuits sent shockwaves through the cryptocurrency industry and signaled the SEC’s heightened commitment to regulating digital asset markets.
Following the initial ruling of the SEC and Ripple legal battle, the SEC has recently engaged in a number of legal battles against non-fungible token (NFT) projects. The agency has filed lawsuits against two prominent players in the space, Impact Theory and Stoner Cats.
The outcomes of these lawsuits remain uncertain, but they could have significant implications for the cryptocurrency industry as a whole. If the SEC succeeds in establishing its authority over NFTs, it could set a precedent for regulating other digital assets, such as decentralized finance (DeFi) protocols and metaverse platforms.
However, the SEC’s efforts to regulate cryptocurrency-related entities may face challenges.
Previous legal battles, such as Grayscale Investments’ successful challenge to the proposed Bitcoin ETF conversion and the judge’s ruling that XRP is not a security in the Ripple case, have established crucial precedents that may empower other cryptocurrency projects to mount robust defenses against the commission’s regulatory actions.
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