LI.FI Protocol Under Attack: $10 Million Drained in Cryptocurrency Hack

• LI.FI protocol suffers a $10 million hack, impacting Arbitrum blockchain; users urged to revoke approvals promptly.
• Cyvers Alerts warns of LI.FI security breach emphasizes the risks of smart contract approvals.
• LI.FI’s $17.5M funding round contrasts with recent $10M cryptocurrency theft; security measures under scrutiny.

LI.FI, a prominent multichain liquidity provider facilitating cross-chain swaps, has fallen victim to a hacker attack, resulting in the theft of over $10 million in cryptocurrency assets. The attack has not only impacted LI.FI has also affected the Arbitrum blockchain, escalating concerns across the crypto community.

According to Cyvers Alerts, the attack targeted LI.FI’s systems, with suspicious transactions, traced back to a specific contract address: 0x1231deb6f5749ef6ce6943a275a1d3e7486f4eae. Meir Dolev, co-founder and chief technology officer at Cyvers, emphasized the importance of vigilance within blockchain protocols amidst such security threats.

The LI.FI protocol team has been swift in responding, advising users to revoke approvals for several addresses involved in the exploit, including 0x341e94069f53234fE6DabeF707aD424830525715, 0xDE1E598b81620773454588B85D6b5D4eEC32573e, and 0x24ca98fB6972F5eE05f0dB00595c7f68D9FaFd68. They reassured users that those who did not set infinite approvals were not at immediate risk.

Historical Context and Vulnerabilities

Cyvers Alerts reported that approximately $10 million in cryptocurrency holdings had already been drained, with ongoing impacts observed on the Arbitrum blockchain. Dolev highlighted the risks associated with granting wallet approvals to smart contracts, urging users to exercise caution.

In a subsequent update, Cyvers reiterated the recommendation for users to revoke approvals specifically for the 0x1231deb6f5749ef6ce6943a275a1d3e7486f4eae address to mitigate further losses. The incident has highlighted vulnerabilities in blockchain security frameworks, prompting renewed calls for enhanced protective measures.

Industry Impact and Future Outlook

This recent attack on LI.FI echoes a previous security breach in March 2022, where an exploit in the protocol’s smart contract led to losses amounting to $600,000. The LI. The FI team then identified a vulnerability in the swapping feature, which allowed attackers to manipulate pre-bridge swap mechanisms.

Since its founding in 2021, LI.FI has gained recognition in the cryptocurrency community for enabling easy cross-chain transactions. In April 2023, the liquidity hub located in Berlin secured $17.5 million in a Series A fundraising round that was spearheaded by CoinFund and Superscript. This demonstrated investor confidence in the hub despite prior security concerns.