Cream Finance, a major decentralized finance (DeFi) protocol focused on lending, has suffered a major exploit, with a hacker stealing nearly $19 million from its platform.
An unknown hacker has managed to gain $18.8 million in the latest flash loan exploit of the Cream Finance protocol through a reentrancy bug introduced by the Amp (AMP) token, according to an investigation by blockchain security firm Peckshield.
Announcing the news Monday, Cream Finance said that the protocol has stopped the exploit by pausing supply and borrow contracts on the AMP token. “No other markets were affected,” Cream Finance stated.
C.R.E.A.M. v1 market on Ethereum has suffered an exploit, resulting in a loss of 418,311,571 in AMP and 1,308.09 in ETH, by way of reentrancy on the AMP token contract.
We have stopped the exploit by pausing supply and borrow on AMP. No other markets were affected.
— Cream Finance (@CreamdotFinance) August 30, 2021
Peckshield specified that the hacker exploited the AMP token by re-borrowing assets during its transfer before updating the first to borrow in 17 separate transactions. Providing an example transaction, the security firm stated, “The hacker makes a flashloan of 500 ETH and deposit the funds as collateral. Then the hacker borrows 19M $AMP and makes use of the reentrancy bug to re-borrow 355 ETH inside $AMP token transfer. Then the hacker self-liquidates the borrow.”
“The funds are still parked in 0xCE1F….6EDE. We are actively monitoring this address for any movement,” Peckshield added, providing the hacker’s address.
AMP is an Ethereum-based token that is designed to collateralize payments on the digital payments network Flexa. The AMP token contract implements ERC77-based registry smart contract known as ERC1820. Introduced in 2019, the ERC1820 standard defines a universal registry smart contract where any address “can register which interface it supports and which smart contract is responsible for its implementation.”
Following the attack, both the AMP token and the Cream Finance’s native token CREAM saw a notable price drop, with AMP plummeting nearly 13% over the past 24 hours. At the time of writing, the AMP token is trading at $0.051908, while the CREAM token is trading at $167, down around 5% over the past 24 hours, according to data from CoinGecko.
As previously reported by Cointelegraph, DeFi product Alpha Homora in February suffered a $37 million hack exploited using Cream’s Iron Bank protocol-to-protocol lending platform.
The latest flash loan exploit comes amid the increasing amount of hacks and exploits among both centralized and decentralized cryptocurrency platforms. On Aug. 28, Bilaxy crypto exchange suffered a major hot wallet hack leading to 295 ERC-20 tokens being compromised. Liquid lost nearly $100 million in a hack that took place on Aug 19.
Ray Schuetz received a Masters Degree in computer science from The University of Texas (Austin). Ray has been working as a full-time blockchain consultant for the past 3 years. In his spare time, Ray enjoys writing for EthereumCryptocurrency.com and other crypto news publications.