BZx DeFi Protocol Hacked Again - Revision history

Azoundria at 17:52, 2 May 2023

2023-05-02T17:52:37Z

← Older revision		Revision as of 11:52, 2 May 2023
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	{{Imported Case Study\|source=https://www.quadrigainitiative.com/casestudy/defiprotocolbzxhackedagain.php}}		{{Imported Case Study 2\|source=https://www.quadrigainitiative.com/casestudy/defiprotocolbzxhackedagain.php}}
	{{Unattributed ~~Citations~~}}		{{Unattributed Sources}}

	[[File:Bzx.jpg\|thumb\|bZx]]The bZx protocol has now been hacked 3 times. The previous 2 times were in February 2020.		[[File:Bzx.jpg\|thumb\|bZx]]The bZx protocol has now been hacked 3 times. The previous 2 times were in February 2020.
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	In this case, no funds were ultimately lost as the hacker returned the funds.		In this case, no funds were ultimately lost as the hacker returned the funds.

	This is a global/international case not involving a specific country.		This is a global/international case not involving a specific country.<ref name="cryptopotato-398" /><ref name="newsdotbitcoin-399" /><ref name="cointelegraph-400" /><ref name="slowmisthacked-678" /><ref name="cryptobriefing-825" /><ref name="cryptobriefing-1167" /><ref name="certikiotwitter-5467" />
	<ref name="cryptopotato-398" /><ref name="newsdotbitcoin-399" /><ref name="cointelegraph-400" /><ref name="slowmisthacked-678" /><ref name="cryptobriefing-825" /><ref name="cryptobriefing-1167" /><ref name="certikiotwitter-5467" />

	== About BZx ==		== About BZx ==
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	!Description		!Description
	\|-		\|-
	\|September 13th, 2020 ~~12:00:00 AM~~		\|September 13th, 2020
	\|Main Event		\|Main Event
	\|Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.		\|Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.
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	\|		\|
	\|}		\|}

			== Technical Details ==
			This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?

	== Total Amount Lost ==		== Total Amount Lost ==
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	== Ongoing Developments ==		== Ongoing Developments ==
	What parts of this case are still remaining to be concluded?		What parts of this case are still remaining to be concluded?
			== General Prevention Policies ==
	== Prevention Policies ==
	In general, storing the majority of funds in a hot wallet (aka smart contract) is not a good idea. More secure forms of storage exist, particularly cold storage with multiple signatures of reputable trained individuals to remove funds.		In general, storing the majority of funds in a hot wallet (aka smart contract) is not a good idea. More secure forms of storage exist, particularly cold storage with multiple signatures of reputable trained individuals to remove funds.

	In this case, no funds were ultimately lost as the hacker returned the funds.		In this case, no funds were ultimately lost as the hacker returned the funds.
			== Individual Prevention Policies ==
			{{Prevention:Individuals:Placeholder}}

			{{Prevention:Individuals:End}}

			== Platform Prevention Policies ==
			{{Prevention:Platforms:Placeholder}}

			{{Prevention:Platforms:End}}

			== Regulatory Prevention Policies ==
			{{Prevention:Regulators:Placeholder}}

			{{Prevention:Regulators:End}}

	== References ==		== References ==
	<references><ref name="cryptopotato-398">[https://cryptopotato.com/defi-protocol-bzx-hacked-again-8-million-worth-of-eth-link-stablecoins-drained/ DeFi Protocol bZx Hacked Again: $8 Million Worth of ETH, LINK, Stablecoins Drained (Updated)] (Sep 13, 2020)</ref>		<references><ref name="cryptopotato-398">[https://cryptopotato.com/defi-protocol-bzx-hacked-again-8-million-worth-of-eth-link-stablecoins-drained/ DeFi Protocol bZx Hacked Again: $8 Million Worth of ETH, LINK, Stablecoins Drained (Updated)] (Sep 14, 2020)</ref>

	<ref name="newsdotbitcoin-399">[https://news.bitcoin.com/defi-protocol-bzx-loses-8-1-million-in-third-hack-this-year/ Defi Protocol Bzx Loses $8.1 Million in Third Hack This Year \| News Bitcoin News] (Sep 13, 2020)</ref>		<ref name="newsdotbitcoin-399">[https://news.bitcoin.com/defi-protocol-bzx-loses-8-1-million-in-third-hack-this-year/ Defi Protocol Bzx Loses $8.1 Million in Third Hack This Year \| News Bitcoin News] (Sep 14, 2020)</ref>

	<ref name="cointelegraph-400">[https://cointelegraph.com/news/defi-platform-bzx-sees-new-8m-hack-from-one-misplaced-line-of-code DeFi platform bZX sees new $8M hack from one misplaced line of code] (Sep 13, 2020)</ref>		<ref name="cointelegraph-400">[https://cointelegraph.com/news/defi-platform-bzx-sees-new-8m-hack-from-one-misplaced-line-of-code DeFi platform bZX sees new $8M hack from one misplaced line of code] (Sep 14, 2020)</ref>

	<ref name="slowmisthacked-678">[https://hacked.slowmist.io/en/?c=ETH%20DApp SlowMist Hacked - SlowMist Zone] (May 17, 2021)</ref>		<ref name="slowmisthacked-678">[https://hacked.slowmist.io/en/?c=ETH%20DApp SlowMist Hacked - SlowMist Zone] (May 18, 2021)</ref>

	<ref name="cryptobriefing-825">[https://cryptobriefing.com/50-million-lost-the-top-19-defi-cryptocurrency-hacks-2020/ Millions Lost: The Top 19 DeFi Cryptocurrency Hacks of 2020 \| Crypto Briefing] (May 21, 2021)</ref>		<ref name="cryptobriefing-825">[https://cryptobriefing.com/50-million-lost-the-top-19-defi-cryptocurrency-hacks-2020/ Millions Lost: The Top 19 DeFi Cryptocurrency Hacks of 2020 \| Crypto Briefing] (May 22, 2021)</ref>

	<ref name="cryptobriefing-1167">[https://cryptobriefing.com/bzxs-third-exploit-2020-ends-with-8-million-lost/ bZx Recovers $8.1M Lost in Third Exploit \| Crypto Briefing] (Jun 26, 2021)</ref>		<ref name="cryptobriefing-1167">[https://cryptobriefing.com/bzxs-third-exploit-2020-ends-with-8-million-lost/ bZx Recovers $8.1M Lost in Third Exploit \| Crypto Briefing] (Jun 27, 2021)</ref>

	<ref name="certikiotwitter-5467">[https://mobile.twitter.com/certik_io/status/1305319187095707649 https://mobile.twitter.com/certik_io/status/1305319187095707649] (Jan 10, 2022)</ref></references>		<ref name="certikiotwitter-5467">[https://mobile.twitter.com/certik_io/status/1305319187095707649 https://mobile.twitter.com/certik_io/status/1305319187095707649] (Jan 10, 2022)</ref></references>

Azoundria at 17:22, 17 February 2023

2023-02-17T17:22:52Z

← Older revision		Revision as of 11:22, 17 February 2023
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	{{Imported Case Study\|source=https://www.quadrigainitiative.com/casestudy/defiprotocolbzxhackedagain.php}}		{{Imported Case Study\|source=https://www.quadrigainitiative.com/casestudy/defiprotocolbzxhackedagain.php}}
			{{Unattributed Citations}}

	[[File:Bzx.jpg\|thumb\|~~BZx~~]]The bZx protocol has now been hacked 3 times. The previous 2 times were in February 2020.		[[File:Bzx.jpg\|thumb\|bZx]]The bZx protocol has now been hacked 3 times. The previous 2 times were in February 2020.

	In this case, no funds were ultimately lost as the hacker returned the funds.		In this case, no funds were ultimately lost as the hacker returned the funds.

	This is a global/international case not involving a specific country.		This is a global/international case not involving a specific country.
			<ref name="cryptopotato-398" /><ref name="newsdotbitcoin-399" /><ref name="cointelegraph-400" /><ref name="slowmisthacked-678" /><ref name="cryptobriefing-825" /><ref name="cryptobriefing-1167" /><ref name="certikiotwitter-5467" />

	== About BZx ==		== About BZx ==
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	Don't Include:		Don't Include:

	* Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.		* Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
	* Anything that wasn't reasonably knowable at the time of the event.		* Anything that wasn't reasonably knowable at the time of the event.
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	\|-		\|-
	\|September 13th, 2020 12:00:00 AM		\|September 13th, 2020 12:00:00 AM
	\|~~First~~ Event		\|Main Event
	\|~~This is an expanded~~ description of what happened and the impact. If multiple lines are necessary, add them here.		\|Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.
	\|-
	\|
	\|
	\|
	\|-		\|-
	\|		\|
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	== Total Amount Lost ==		== Total Amount Lost ==
	The total amount lost ~~is unknown~~.		The total amount lost has been estimated at $8,100,000 USD.

	How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?		How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?
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	== Total Amount Recovered ==		== Total Amount Recovered ==
	~~It is unknown how much was~~ recovered.		There do not appear to have been any funds recovered in this case.

	What funds were recovered? What funds were reimbursed for those affected users?		What funds were recovered? What funds were reimbursed for those affected users?
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	== References ==		== References ==
	[https://cryptopotato.com/defi-protocol-bzx-hacked-again-8-million-worth-of-eth-link-stablecoins-drained/ DeFi Protocol bZx Hacked Again: $8 Million Worth of ETH, LINK, Stablecoins Drained (Updated)] (Sep 13)		<references><ref name="cryptopotato-398">[https://cryptopotato.com/defi-protocol-bzx-hacked-again-8-million-worth-of-eth-link-stablecoins-drained/ DeFi Protocol bZx Hacked Again: $8 Million Worth of ETH, LINK, Stablecoins Drained (Updated)] (Sep 13, 2020)</ref>

	[https://news.bitcoin.com/defi-protocol-bzx-loses-8-1-million-in-third-hack-this-year/ Defi Protocol Bzx Loses $8.1 Million in Third Hack This Year \| News Bitcoin News] (Sep 13)		<ref name="newsdotbitcoin-399">[https://news.bitcoin.com/defi-protocol-bzx-loses-8-1-million-in-third-hack-this-year/ Defi Protocol Bzx Loses $8.1 Million in Third Hack This Year \| News Bitcoin News] (Sep 13, 2020)</ref>

	[https://cointelegraph.com/news/defi-platform-bzx-sees-new-8m-hack-from-one-misplaced-line-of-code DeFi platform bZX sees new $8M hack from one misplaced line of code] (Sep 13)		<ref name="cointelegraph-400">[https://cointelegraph.com/news/defi-platform-bzx-sees-new-8m-hack-from-one-misplaced-line-of-code DeFi platform bZX sees new $8M hack from one misplaced line of code] (Sep 13, 2020)</ref>

	[https://hacked.slowmist.io/en/?c=ETH%20DApp SlowMist Hacked - SlowMist Zone] (May 17)		<ref name="slowmisthacked-678">[https://hacked.slowmist.io/en/?c=ETH%20DApp SlowMist Hacked - SlowMist Zone] (May 17, 2021)</ref>

	[https://cryptobriefing.com/50-million-lost-the-top-19-defi-cryptocurrency-hacks-2020/ Millions Lost: The Top 19 DeFi Cryptocurrency Hacks of 2020 \| Crypto Briefing] (May 21)		<ref name="cryptobriefing-825">[https://cryptobriefing.com/50-million-lost-the-top-19-defi-cryptocurrency-hacks-2020/ Millions Lost: The Top 19 DeFi Cryptocurrency Hacks of 2020 \| Crypto Briefing] (May 21, 2021)</ref>

	[https://cryptobriefing.com/bzxs-third-exploit-2020-ends-with-8-million-lost/ bZx Recovers $8.1M Lost in Third Exploit \| Crypto Briefing] (Jun 26)		<ref name="cryptobriefing-1167">[https://cryptobriefing.com/bzxs-third-exploit-2020-ends-with-8-million-lost/ bZx Recovers $8.1M Lost in Third Exploit \| Crypto Briefing] (Jun 26, 2021)</ref>

	[https://mobile.twitter.com/certik_io/status/1305319187095707649 https://mobile.twitter.com/certik_io/status/1305319187095707649] (Jan 10)		<ref name="certikiotwitter-5467">[https://mobile.twitter.com/certik_io/status/1305319187095707649 https://mobile.twitter.com/certik_io/status/1305319187095707649] (Jan 10, 2022)</ref></references>

Azoundria: Created page with "{{Imported Case Study|source=https://www.quadrigainitiative.com/casestudy/defiprotocolbzxhackedagain.php}} BZxThe bZx protocol has now been hacked 3 times. The previous 2 times were in February 2020. In this case, no funds were ultimately lost as the hacker returned the funds. This is a global/international case not involving a specific country. == About BZx == "In yet another jolt to the decentralized finance (DeFi) community, margin, and leve..."

2023-01-25T17:59:57Z

Created page with "{{Imported Case Study|source=https://www.quadrigainitiative.com/casestudy/defiprotocolbzxhackedagain.php}} thumb|BZxThe bZx protocol has now been hacked 3 times. The previous 2 times were in February 2020. In this case, no funds were ultimately lost as the hacker returned the funds. This is a global/international case not involving a specific country. == About BZx == "In yet another jolt to the decentralized finance (DeFi) community, margin, and leve..."

New page

{{Imported Case Study|source=https://www.quadrigainitiative.com/casestudy/defiprotocolbzxhackedagain.php}}

[[File:Bzx.jpg|thumb|BZx]]The bZx protocol has now been hacked 3 times. The previous 2 times were in February 2020.

In this case, no funds were ultimately lost as the hacker returned the funds.

This is a global/international case not involving a specific country.

== About BZx ==
"In yet another jolt to the decentralized finance (DeFi) community, margin, and leverage-based lending and trading platform, bZx became the target of another hack. In the hack, which was much bigger than the previous attacks, hackers made away with $8 million worth of cryptocurrencies." "This time hackers drained a little more over $8 million worth of cryptocurrencies leveraging a duplication bug that enabled them to make away with 219,199.66 LINK, 4,502.70 ETH, 1,756,351.27 USDT, 1,412,048.48 USDC, 667,988.62 DAI." "On delving deeper, bZx’s official incident report reveals that a loophole in the ‘transferFrom() function’ that enables the transfer of ERC20 tokens from one protocol to the other was leveraged by hackers." "It was possible to call this function to create and transfer an iToken to yourself, allowing you to artificially increase your balance." "Two audit firms, Peckshield and Certik, failed to pick up the flawed smart contracts code. Peckshield responded, saying: “One audit cannot guarantee to find all potential issues, but with continuous work from developers and auditors, we are getting ever closer to the goal of minimizing security risks.”"

"bZx officially tweeted that at 3:28 am Eastern time (15:30, September 13th, Beijing time), we began to study the decline in TVL of the agreement. By 6:18 AM EST (18:30, September 13th, Beijing time), we confirmed that several iTokens had repeated incidents. Lending is temporarily suspended. The duplicate method has been patched from the iToken contract code, and the agreement has resumed normal operation. According to the information of the founder of Compound, there are a total of US$2.6 million in LINK, US$1.6 million in ETH, and US$3.8 million in stablecoins, with a total of US$8 million in assets affected. 1inch co-founder Anton Bukov tweeted that the attacker had stolen about 4,700 ETH in this incident and attached the address of the stolen funds. In response, bZx said that the funds are currently not at risk. The funds listed have been deducted from our insurance fund. On September 16, bZx released an iToken repeat incident report, and the attacker has returned all funds."

"Bzx noticed the security breach some hours later and immediately halted minting and burning of iTokens. Trading resumed after a fix that corrected the balances and duplications." "No funds are at risk. Due to a token duplication incident, the protocol insurance fund has transiently accrued a debt. The insurance fund is backstopped by both the token treasury in addition to protocol cash flows." "Past experience led bZX to create an insurance fund to cover for these “black swan events,” and the stolen coins were thus debited on the fund, which receives 10% of the protocol’s revenue through interest rates." "The bZX team told Cointelegraph that the hacker returned the money..., saying, “The attacker was tracked and identified due to their on-chain activity, he came forward shortly after this and returned the funds stolen.”"

This is a global/international case not involving a specific country.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

* Known history of when and how the service was started.
* What problems does the company or service claim to solve?
* What marketing materials were used by the firm or business?
* Audits performed, and excerpts that may have been included.
* Business registration documents shown (fake or legitimate).
* How were people recruited to participate?
* Public warnings and announcements prior to the event.

Don't Include:

* Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
* Anything that wasn't reasonably knowable at the time of the event.
There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

== The Reality ==
This sections is included if a case involved deception or information that was unknown at the time. Examples include:

* When the service was actually started (if different than the "official story").
* Who actually ran a service and their own personal history.
* How the service was structured behind the scenes. (For example, there was no "trading bot".)
* Details of what audits reported and how vulnerabilities were missed during auditing.

== What Happened ==
The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.
{| class="wikitable"
|+Key Event Timeline - bZx DeFi Protocol Hacked Again
!Date
!Event
!Description
|-
|September 13th, 2020 12:00:00 AM
|First Event
|This is an expanded description of what happened and the impact. If multiple lines are necessary, add them here.
|-
|
|
|
|-
|
|
|
|}

== Total Amount Lost ==
The total amount lost is unknown.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

== Immediate Reactions ==
How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

== Ultimate Outcome ==
What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

== Total Amount Recovered ==
It is unknown how much was recovered.

What funds were recovered? What funds were reimbursed for those affected users?

== Ongoing Developments ==
What parts of this case are still remaining to be concluded?

== Prevention Policies ==
In general, storing the majority of funds in a hot wallet (aka smart contract) is not a good idea. More secure forms of storage exist, particularly cold storage with multiple signatures of reputable trained individuals to remove funds.

In this case, no funds were ultimately lost as the hacker returned the funds.

== References ==
[https://cryptopotato.com/defi-protocol-bzx-hacked-again-8-million-worth-of-eth-link-stablecoins-drained/ DeFi Protocol bZx Hacked Again: $8 Million Worth of ETH, LINK, Stablecoins Drained (Updated)] (Sep 13)

[https://news.bitcoin.com/defi-protocol-bzx-loses-8-1-million-in-third-hack-this-year/ Defi Protocol Bzx Loses $8.1 Million in Third Hack This Year | News Bitcoin News] (Sep 13)

[https://cointelegraph.com/news/defi-platform-bzx-sees-new-8m-hack-from-one-misplaced-line-of-code DeFi platform bZX sees new $8M hack from one misplaced line of code] (Sep 13)

[https://hacked.slowmist.io/en/?c=ETH%20DApp SlowMist Hacked - SlowMist Zone] (May 17)

[https://cryptobriefing.com/50-million-lost-the-top-19-defi-cryptocurrency-hacks-2020/ Millions Lost: The Top 19 DeFi Cryptocurrency Hacks of 2020 | Crypto Briefing] (May 21)

[https://cryptobriefing.com/bzxs-third-exploit-2020-ends-with-8-million-lost/ bZx Recovers $8.1M Lost in Third Exploit | Crypto Briefing] (Jun 26)

[https://mobile.twitter.com/certik_io/status/1305319187095707649 https://mobile.twitter.com/certik_io/status/1305319187095707649] (Jan 10)