Decentralized protocol, Onyx is facing a major breach as bad actors drained $3.2 million sparking user fears. This adds to the recent cases of hacking activities in the crypto market as global authorities ramp up scrutiny. Some commentators say the infamous trend will dampen sentiment amid rising institutional investment.
Onyx Hack Losses Hit $3M
OnyxDAO is reportedly facing a security breach that has led to losses hitting $3.2 million. Blockchain security and data firm PeckShield flagged the recent activity around the company. On-chain data shows the malicious wallet holds large amounts of VUSD with funds being moved across platforms. The attacker currently holds about 521 ETH worth approximately $1.36M.
It seems today’s victim @OnyxDAO (w/ >$3.8m loss) falls prey to a known precision issue in forked CompoundV2 code base. The drained funds include 4.1m VUSD, 7.35m XCN, 5k DAI, 0.23 WBTC, 50k USDT.
The bug is exploited to leverage a nearly empty market to manipulate the exchange… https://t.co/Apddu5aMbD pic.twitter.com/EKKRarFu5X
— PeckShield Inc. (@peckshield) September 26, 2024
The Onyx incident has been attributed to a precision issue involving the CompoundV2 code base with the bug exploited to manipulate exchange rates leading to loss of funds. Assets drained include VUSD, DAI, XCN, USDT, and WBTC. This event has sparked debates on the security of decentralized protocols and assets within the ecosystem. Previously, crypto users have faced huge losses due to the activities of hackers.
While phishing attacks and bridge hacks are popular targets, other platforms also face security incidents to varying degrees. Recently, Ethena Labs suspended its website activities after it faced a security breach on its domain registrar. The platform also urged users not to interact with sites purporting to be Ethena to avoid losses.
Regulators Ramp Up Efforts
Hacks similar to the Onyx incident have drawn the attention of regulators to the crypto market. While these attempts are to protect user funds from bad actors, regulatory methods can stifle innovation in the sector. This is seen in the United States regulatory sphere with the Securities and Exchange Commission (SEC) filing several lawsuits against crypto exchanges and firms.
US Congressman Ritchie Torres accused the SEC of misusing its SAB 121 regulation to target crypto firms. However, the community lauds recent efforts made in the US ecosystem as the election approaches.
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