TL;DR
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Abracadabra Money, Daniele Sestagalli’s DeFi platform, suffers attack: $6.5M lost, mainly 2.74K ETH, started with 1 ETH since Tornado Cash.
- Detected on January 30 by Cyvers and PeckShield. MIM, the stablecoin, falls from $1 to $0.7672, then recovers to $0.96.
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@MIM_Spell confirms active investigation. Action plan: buy back MIM and burn units from the DAO.
In a significant blow to the DeFi (Decentralized Finance) lending platform, Abracadabra Money, created by Daniele Sestagalli, has been hit by a massive security attack.
The platform, known for its Ethereum-based non-custodial stablecoin protocol, has experienced the loss of millions of dollars in crypto assets.
The attack, detected by two blockchain security firms on January 30, involved multiple suspicious transactions related to the platform’s native stablecoin, Magic Internet Money (MIM).
According to reports from Cyvers and PeckShield, the total loss amounts to approximately $6.5 million, mostly made up of 2.74 thousand Ether (ETH).
The initial loss for @MIM_Spell is ~$6.5M, comprising 2.74K $ETH.
The exploiter initially funded the attack with 1 $ETH from #TornadoCash. pic.twitter.com/lPENOLZA2I— PeckShield Inc. (@peckshield) January 30, 2024
Interestingly, the attacker initiated the attack with a 1 ETH deposit from Tornado Cash, an Ethereum mixing service that seeks to increase the anonymity of transactions.
The official response from Abracadabra Money came through a statement on its account @MIM_Spell
The team confirmed the existence of the exploit and announced that they are actively investigating the situation.
We are aware of an exploit involving certain cauldrons on Ethereum.
Our engineering team is triaging and investigating the situation.
To the best of its Ability, the DAO treasury will be buying back MIM from the market to then burn.
More updates are coming.
— 🧙🏼♂️ (@MIM_Spell) January 30, 2024
To counter the impact of the attack, the platform’s DAO (Decentralized Autonomous Organization) treasury plans to buy back MIM on the market and subsequently burn the acquired units.
In terms of market impact, data from CoinMarketCap shows that the MIM stablecoin decoupled, falling from $1 to $0.7672 following news of the attack.
At the time of the last update, MIM was trading at $0.96, having recovered much of the momentary loss following the massive attack.
The situation is developing, and Abracadabra Money is expected to provide more updates in the future.
The crypto community and investors will be watching closely to evaluate the platform’s response and the effectiveness of the measures taken to address the security vulnerability.
This incident highlights the importance of transparency and clear communication in the DeFi space, reminding users of the need for caution when engaging in decentralized financial activities.
