June 25, 2019 | AtoZ Markets – As the media reports, due to a recent hack attack, an on-chain synthetic asset platform running on Ethereum– Synthetix has lost 37 million synthetic Ether (sETH). The company’s CEO speaks out about the recent Synthetix hack.
About the recent Synthetix hack in a brief
As the media reports, the cryptocurrency startup suffered from a so-called oracle attack, the virus which exploits the availability of a weakness in a system of the crypto exchange. After the security breach in the system is detected it later is used as an “oracle” to give a simple go/no go indication to tell an attacker whether he has reached, or is nearing, the goal.
The crypto hackers usually combine oracle with a systematic search of the problem space to complete their attack. Although the loss of the synthetic crypto startup can be verified on Etherscan, due to the relative liquidity of sETH in the secondary markets, the fiat value associated with the loss cannot be calculated.
Synthetix CEO speaks out of the recent security breach
Synthetix started its path as Havven, a decentralized stablecoin in late 2016. At the moment it is a decentralized synthetic assets platform, which allows its users to mint synthetic cryptocurrencies on Ethereum’s blockchain (Synths). According to the description on the official website, the company also enables trading crypto, commodities, and Forex on a peer-to-peer platform. The compromised sETH tracks the price of Ether using an Oracle-backed price feed.
While speaking about the recent hack incident, Kain Warwick, co-founder, and CEO of the company noted, the attack was carried out by an arbitrage bot, and they have already reached out to the owner of the bot. Warwick explained further: “There has been an incident with the price feed of sKRW, we are currently investigating the root cause, but during the time when the price feed was returning the wrong value, we believe an automated arb bot converted into sKRW and then into sETH,”
Due to the incident, the company has terminated all transfers within its networks as it has complete control over its smart contracts. It also initiated a bug bounty program to encourage ethical hackers to report bugs on the platform.
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