QUADRIGA INITIATIVE
CRYPTO WATCHDOG & FRAUD RECOVERY PLATFORM
A COMMUNITY-BASED, NOT-FOR-PROFIT
$68 000 USD
JULY 2021
GLOBAL
VORTEX DEFI
DESCRIPTION OF EVENTS
"Unlock the world Of Decentralized Finance." "Vortex DeFi is a gateway to the world of DeFi, bringing all the DeFi instruments such as yield management, NFT, swapping, and insurance together on one platform, creating a seamless experience for the end-user."
"We aim to bring together leading protocols and platforms to allow honest farmers to leverage the maximum potential of decentralized finance." "Swap assets in an instant with liquidity from multiple decentralised exchanges."
"Vortex DeFi token is now live on ChainSwap. You can bridge VTX to ETH and BSC using ChainSwap!"
"ChainSwap is a bridge protocol that links the Ethereum and Binance Smart Chain (BSC) blockchains." "It supports Binance Smart Chain, Ethereum, Polygon, and Huobi Eco Chain." "The ChainSwap hacker identified and exploited a vulnerability in the ChainSwap smart contract. This vulnerability enabled them to steal and mint new tokens for various protocols that were using the bridge to trade across Ethereum and BSC."
Investigation by ChainSwap revealed "a bug in the token cross-chain quota code. The on-chain swap bridge quota is automatically increased by the signature node, which is intended to be more decentralized without manual control. However, due to a logical flaw in code, this led to an exploit by allowing invalid addresses which weren’t whitelisted to automatically increase the amount."
"The attacker managed to take control of the projects’ BSC contracts by exploiting ChainSwap. The attacker minted tokens directly to their address, then sold them on BSC’s most popular decentralized exchange, PancakeSwap." "[T]he attacker used the PancakeSwap exchange to convert the stolen tokens to WBNB, DAI, and other tokens."
"Dear Vortex DeFi community, as you are aware that today @chain_swap contracts were exploited which impacted multiple projects including us."
"Chainswap’s contracts were attacked by hackers on 10th July, Saturday around 3–4 PM EST. As a result of this exploit, hackers were successful in stealing tokens for more than 10 projects including, Vortex DeFi, Dafi, Option Room, Razor, Nord Finance, Oro, Antimatter, and others. During this process, close to 4 million $VTX tokens were compromised and sold by the hacker on Uniswap."
"Approximately two hours before the @chain_swap hack, close to 4 million $VTX tokens on the Ethereum mainnet came under the control of the hacker through the @chain_swap bridge contract." "Once the tokens came under control, it was sold through Uniswap [in] two transactions causing a massive price crash and removing close to 30–35 eth worth liquidity from the market." "Based on the transactions, it is highly likely that the attacker has sold all the tokens. $VTX can be traded on Pancakeswap and Uniswap."
"Vortex DeFi’s smart contract for $VTX (audited by Zokyo)and the other two staking contracts remain unaffected."
"Chainswap said it had already repurchased a small amount of the affected tokens from the market and returned the contract wallet. The rest will be paid out in full by the Chainswap vault." "ChainSwap team has now prepared and executed a compensation plan in consensus with the affected projects." "In order to bring everybody a more rigorous, efficient bridge, the next development model of ChainSwap will be adjusted to ensure maximum safety."
"For now, Chainswap has temporarily closed its cross-chain bridge." "ChainSwap worked with the police and OKEx to identify the attackers, and managed to negotiate the recovery of Corra and Rai tokens. An initial email with the attackers suggested the attackers return $1 million."
“Sorry for the trouble, you sound genuinely like great people but money is money,” the attackers of the earlier exploit told ChainSwap.
"ChainSwap is excited to announce that we have successfully integrated with Anyswap and Chainswap bridge is now live. We thank our community for its patience during the last few weeks."
Vortex DeFi is a service which enables yield management, NFTs, swapping, and insurance. Their token used ChainSwap to exist on multiple blockchains, which required some funds to be stored in the smart contract hot wallet.
The ChainSwap bridge was hacked, and the attacker was able to obtain tokens, which were sold, lowering the price. It appears that Vortex DeFi plans to continue using ChainSwap, as they announced a new bridge being set up on August 26th.
HOW COULD THIS HAVE BEEN PREVENTED?
Theoretically, decentralized finance will eventually result in hackers having exploited every vulnerability that exists. However, it's impossible to know when that will occur and if a contract is truly secure, as opposed to there still being an exploit that just hasn't been noticed yet. For any complex smart contract, it's impossible to prove security and plenty of fully audited contracts have been exploited.
In this situation, there was luckily not much taken. Platforms should, generally, be prepared for the full loss of all assets stored in hot wallets (including smart contracts). Assets that do not need to be accessed quickly should be stored securely in a simple offline multi-signature wallet.
Chainswap Black Sunday, over 20 DEFI projects were stolen - 律动BlockBeats (Aug 24)
ChainSwap Exploit 11 July 2021 Post-Mortem | by ChainSwap | Medium (Aug 24)
MappableToken | 0x06c24002f43e3AF904EeEc581734EA3A7DbF355E (Aug 24)
ChainSwap Exploit Leads to Multi-Million Loss For DeFi Tokens - Decrypt (Aug 24)
@chain_swap Twitter (Aug 24)
Explained: The ChainSwap Hack (July 2021) - Halborn (Aug 24)
$8 Million Lost in Major ChainSwap Exploit | Crypto Briefing (Aug 24)
ChainSwap re-launch, we are live. ChainSwap is excited to announce that… | by ChainSwap | Medium (Aug 29)
Rekt - ChainSwap - REKT (Aug 29)
blocksec-incidents/2021.md at main · openblocksec/blocksec-incidents · GitHub (Aug 11)
@chain_swap Twitter (Sep 15)
ChainSwap bridges VTX to BSC and lists VTX - ChainSwap - Medium (Sep 15)
Vortex (Sep 15)
Guide To Mint Vtx Bep2o With The Chain Swap Binance Smart Chain Bridge (Sep 21)
@VortexDefi Twitter (Sep 21)
@VortexDefi Twitter (Sep 21)
Message About Chainswap Hack (Sep 21)
Ethereum Transaction Hash (Txhash) Details | Etherscan (Sep 21)
Ethereum Transaction Hash (Txhash) Details | Etherscan (Sep 21)
Ethereum Transaction Hash (Txhash) Details | Etherscan (Sep 21)
Ethereum Transaction Hash (Txhash) Details | Etherscan (Sep 21)
Address 0xEda5066780dE29D00dfb54581A707ef6F52D8113 | Etherscan (Sep 21)
Address 0xeda5066780de29d00dfb54581a707ef6f52d8113 | BscScan (Sep 21)
Vortex Defi price today, VTX to USD live, marketcap and chart | CoinMarketCap (Sep 21)
Chainswap Post Mortem Deep Dive Into The Exploit (May 7)
Random Numbers Don’t Lie: A Closer Technical Look into Recent DeFi Hacks (May 7)
