Convex Finance Malicious DNS Hijack

Convex Finance Homepage/Logo

Convex Finance is a tool to increase rewards for stakers and liquidity providers on the Curve Finance protocol. The service used NameCheap to host their primary domain, which was the main way customers would interact with the service. On June 23rd, a NameCheap support agent had their account breached, and a request was made to change the DNS settings on multiple domains including the Convex Finance domain name. This redirected the website to a phishing version, which looked identical to main version but requested approval on a new smart contract with a similar address. The new smart contract allowed the attacker to steal approved funds and was active on the site for a few hours, plus up to 48 hours of DNS propagation/caching time for anyone who accessed the site in that timeframe. While at least 40 wallet addresses gave approvals, it appears that only a limited number of tokens were ultimately taken from those wallets. The Convex Finance team agreed to reimburse affected users from their treasury.

About Convex Finance

Convex Finance is a platform designed to enhance rewards for CRV stakers and liquidity providers on Curve Finance. It simplifies the process of staking on Curve and the CRV-locking system through its native fee-earning token, CVX. The platform enables Curve.fi liquidity providers to earn trading fees and claim boosted CRV without having to lock CRV tokens themselves. Users can deposit Curve LP tokens to earn Curve trading fees, boosted CRV, and CVX tokens, with the boost being pooled from CRV stakers. Convex Finance aims to make the staking process accessible to a wider audience, providing an easy-to-use interface for both experienced and novice users. Notably, Convex Finance holds the majority of Curve Finance's CRV tokens in circulation, contributing significantly to the decentralized economy's liquidity.

Convex Finance launched on April 15th, 2021, and quickly gained traction with over 17m CRV tokens staked within the first 2 weeks. The Convex Finance protocol was audited by MixBytes.

Convex Finance Homepage:

The Reality

While smart contracts operate in a decentralized "trustless" manner, most users will tend to interact with them using transactions generated by a centralized "trusted" website. When a domain name is accessed on the internet, a service called DNS (Domain Name System) is used to route the user to the appropriate server. If the records are modified, users could be redirected to a different server, which would be a common scenario if a website changes their routing infrastructure or hosting providers.

The Convex Finance project used NameCheap as their domain registrar for their primary domain convexfinance.com. The procedures at NameCheap for most domains were such that individual support team members were able to override and modify the DNS of the website.

"Convex used NameCheap as it’s domain registrar for convexfinance.com."

NameCheap also offers a "Domain Vault" service for an additional monthly fee, which appears to have been fully launched on June 20th, 2022, which is surprisingly close to the time of the attack.

"Usually we require a [PIN] code from customer. We also monitor all actions as well a[s] monitor a real time [VIP] list. In the end our [customer support] needs to be able to modify to help customers[,] especially when 99% don't understand [DNS]. If you want complete security use [Domain Vault]"

While Convex Finance reportedly used 2FA, Convex Finance was not enrolled in the DomainVault service, which had only recently launched.

What Happened

After breaching the credentials of a NameCheap customer support agent, an attacker modified the DNS settings for multiple high profile decentralized protocols with domain names registered there, including Convex Finance, Ribbon Finance, Defi Saver, and AllBridge to point to a malicious phishing version of the website. This front-end requested approval for a smart contract with the same first and last 4 characters as the official smart contract address of Convex Finance, and could then drain funds from the wallets of any approving users.

Key Event Timeline - Convex Finance Malicious DNS Hijack

Date	Event	Description
April 15th, 2021 6:04:00 AM	Convex Finance Launch	Convex Finance announces their launch on Twitter.
June 1st, 2021 7:10:00 PM MDT	Justin Bram Tweet	Justin Bram shares a tweet to show users "how to automatically boost [their] @CurveFinance staking yields with @ConvexFinance", an example of a promotion which further drives adoption of the protocol.
March 22nd, 2022	Domain Vault Announced	The first archived appearance of the "Domain Vault" service could be located on NameCheap which costs $19.88/mo and is still "coming soon".
June 20th, 2022 2:02:01 AM MST	Funds Moved Into First Address	The attacker moves funds into their first ethereum address.
June 20th, 2022 3:05:42 AM	First Malicious Contract Creation	The very first smart contract is created by a wallet controlled from the attacker. Malicious contract 0x65a8...3b2f was created by wallet 0x5622...781a.
June 20th, 2022 7:11:15 AM MDT	Transfer CRV To Contract	160.996854988110785532 CRV is transferred to phishing Ethereum address 0xcdc0f019f0ec0a903ca689e2bced3996efc53939.
June 20th, 2022 7:26:48 AM	Malicious Contract Creation	The malicious smart contract 0xF403a2c10B0B9feF8f0d4F931df5d86aD187AE31 is created, which is very similar to the "Convex Finance: Booster" smart contract normally at address 0xF403C135812408BFbE8713b5A23a04b3D48AAE31.
June 20th, 2022	Domain Vault Launches	The NameCheap "Domain Vault" service now switches from "Get early access" to "Get Domain Vault" with the price remaining at $19.88/mo.
June 23rd, 2022 6:17:41 AM	Final Malicious Contract	The final malicious smart contract is created by the attacker.
June 23rd, 2022 7:43:37 AM	Funds Moved To Third Address	The attacker moves their ethereum to a third address (presumably in response to flagging of previous addresses) and begins further attacks.
June 23rd, 2022 12:39:13 PM	Fake CvxLockerV2 Smart Contract	A malicious smart contract 0x72a1A639C69F8002F035a7DC231d634D74e6b86E is created. This is very close to the smart contract address of the Convex Locker 2 at 0x72a19342e8F1838460eBFCCEf09F6585e32db86E. This smart contract would later be nicknamed Fake_Phishing5837.
June 23rd, 2022 1:02:00 PM	Alexintosh Tweet	The Twitter user @alexintosh reported an abnormal approval requested by the Convex Finance website, with a similar but not exact smart contract address.
June 23rd, 2022 2:23:00 PM	Notice To Review Approvals	Convex Finance posts their very first announcement on Twitter, requesting users to "[p]lease review approvals while we evaluate a potential front end issue."
June 23rd, 2022 3:46:00 PM	Additional Malicious Contracts	Twitter user @HarukoTech describes several malicious contracts which were created against different protocols and notes that "[t]he attacker seems to be generating similar addresses to well know[n] protocols".
June 23rd, 2022 3:54:00 PM	Bret Woods Suggestion	Twitter user Bret Woods (@fewture) posts that "[w]e're seeing hackers create addresses that match the first 4 and last 4 characters". He suggests a strategy to avoid loss by running the same transaction with "the gas SUPER LOW. Like 5 gwei. Your transaction won't go through, but it will populate on @etherscan where it is much easier to click through and make sure it's doing what you intended to do".
June 23rd, 2022 4:20:00 PM MDT	Stefan Patatu Vanity Attack Tutorial	Stefan Patatu links to a tutorial he wrote (originally on May 6th) to provide the community with more information on the way vanity addresses were employed in the attack.
June 23rd, 2022 4:46:00 PM	Convex Preliminary	Convex Finance first posts on Twitter to announce the DNS hijacking. They list 5 addresses which are affected, note that investigation is still ongoing, and describe the issue as "remediated". While this likely indicates that the DNS records have been updated, it would likely be reasonable to assume that many users who had accessed the website during the attack period may have cached DNS settings pointing to the malicious server - which typically take up to 48 hours to clear. There may also be updated records stored with shared infrastructure such as internet service providers. This means users may still be connecting to the malicious version of the website when accessing Convex Finance via the correct URL for up to 48 hours.
June 23rd, 2022 5:03:47 PM	cvxCRV Token Theft	A blockchain transaction transfers 15,968.95655 cvxCRV tokens to the DNS phishing attacker's wallet.
June 23rd, 2022 5:44:25 PM	CRV Token Theft	A blockchain transaction transfers 433.39359656 CRV tokens to the DNS phishing attacker's wallet.
June 23rd, 2022 6:08:00 PM	Alternative Domains	Convex Finance posts on Twitter recommending users to use some alternative domain names to access the smart contract.
June 23rd, 2022 8:40:06 PM MDT	CoinCu Publishes Article	CoinCu reports that Convex Finance, a leading yield solution in the DeFi market, experienced a DNS attack, where hackers stole the domain address convexfinance.com. They inserted source code into the website to deceive users and make them interact with dangerous contracts. As a precautionary measure, Convex Finance advised users to revoke and deauthorize recently interacted contracts to mitigate potential risks. Convex Finance reported five wallet addresses which had interacted with the malicious contract, and users were instructed to contact the project to proceed with the necessary processing steps. The incident has been temporarily handled, but a post-mortem report is expected to be published soon. This is retweeted. TBD use this as a source for other information.
June 24th, 2022 6:00:00 AM	Telegram Group Operating	A Telegram group has reportedly been set up for communication and coordination between the different affected protocols.
June 24th, 2022 6:14:00 AM MDT	All Attacks Reported Together	All 4 "DNS exploit[s]" with "illicit vanity contracts" are reported by Twitter user CryptoCondom. He also mentioned that all protocols were using 2FA.
June 24th, 2022 7:00:00 AM MDT	Attacks Reported With Screenshots	Twitter user Nalin Gupta is the first to publicly provide screenshots of all 4 DNS attacks in a single thread.
June 24th, 2022 7:24:00 AM MDT	Speculation About Further Domains	Further speculation arises that some other domains may be related. The list referenced are cryptocurrency phishing websites and it does not appear that any of those domains are related to the DNS attack.
June 24th, 2022 7:29:00 AM	Attacks Reported Together Again	Twitter user Tommy Famous also reports on all 4 DNS attacks in a single thread.
June 24th, 2022 7:45:00 AM	Recommending Revoking	"As a precaution, it is recommended that all users who've interacted with the Convex website in the past week review their approvals as we continue to investigate. Use a tool like http://revoke.cash to remove any malicious or suspicious contracts."
June 24th, 2022 10:01:00 AM	NameCheap Response	NameCheap's CEO responds on Twitter that they've "traced this down to a specific [customer support] agent that was either hacked or compromised somehow and have removed all access from this agent. This affected a few targeted domains but we will continue investigating."
June 24th, 2022 10:03:00 AM	Free DomainVault Monitoring	NameCheap's CEO expands the original tweet to say that they "would like to offer [affected services their] Domain Vault service for free and [they] will also place all affected domains on the highest security monitoring".
June 24th, 2022 10:32:00 AM MDT	Nothing To Worry About	NameCheap assures via Twitter that "[t]here is nothing to worry about" and they will "keep investigating".
June 24th, 2022 11:21:00 AM	NameCheap DomainVault	"Usually we require a pin code from customer. We also monitor all actions as well a monitor a real time vip list. In the end our [customer support] needs to be able to modify to help customers especially when 99% don't understand [DNS]. If you want complete security use [DomainVault]"
June 24th, 2022 2:12:53 PM	Affected List Uploaded	The pastebin for the complete list of affected addresses is uploaded by Convex Finance.
June 24th, 2022 2:46:00 PM	Restored Report	Convex Finance posts on Twitter to report that the original domain is back. Original "domain is back to normal operation. DNS is secured and actively monitored." They also share a list of affected addresses..
June 24th, 2022 4:16:00 PM	NameCheap Clarifies Hack	NameCheap responds that it "[l]ooks more like [their customer support] person was hacked."
June 25th, 2022	Domain Vault Discount	NameCheap lowers the price of their Domain Vault service from $19.88/mo to $1.88/mo.
July 1st, 2022 10:14:00 AM	Postmortem Released	Convex Finance releases a post-mortem report with further details of what happened, how much was lost, and their compensation plans.
July 2nd, 2022	Price Segmentation	NameCheap decides to offer two different Domain Vault services from "Silver" tier at $1.88/mo to "Titanium" tier at $19.88/mo.

Technical Details

The account of a customer support agent for NameCheap was believed to be hacked.

This allowed the attacker to modify the DNS settings for multiple high profile decentralized protocols with domain names registered there, including Convex Finance, Ribbon Finance, Defi Saver, and AllBridge. Because they were making the changes as an official support team member, the attacker was able to override any 2-factor authentication, passwords, and security alert settings in the account.

The domain names were modified to point to a server which displayed a similar website to Convex Finance, and requested the user to provide approval to vanity smart contracts which had the same first and last 4 characters as the official smart contract address of Convex Finance.

Instead of function as the standard Convex Finance smart contract would, this new smart contract would enable the attacker to drain all of the user's funds from their wallet.

"The attacker was able to access the NameCheap account, even with 2-factor authentication enabled, a strong password, and security alerts. Convex team still had access to the account; 2FA was still enabled, the password was the same, but the attacker was still able to access the account, change the DNS to point to the malicious website, and disable security alerts."

Smart Contracts Used:

Use of Vanity Ethereum Addresses

The attack increased it's effectiveness by using vanity addresses which were generated to have the same leading 4 characters and ending 4 characters. Many users use wallets and other devices which only display the first and last 4 characters of an address, so they may likely have had no reasonable way of noticing that the wallet addresses did not match. Other users will routinely only check the address they interact with very briefly.

Stefan Patatu explains in a thread, quoting an original tweet from DegenSpartan.

What are vanity addresses?

How can haxxors use them to steal your coins?

How can dapps use them to protec you?

What can wallets do to protec you?

What can you do to protec yourself?

A thread on some obscure knowledge, on things you don’t know you don’t know.

Might save [you].

I wanted to write about this for a long time, but it was this recent thread by @DegenSpartan that eventually provided me with the necessary motivation.

"a fear that i still have is just simply going through the motions and trusting that the front end is sending the correct, rather than a tampered or malicious, data payload for me to sign off on and broadcast to the chain

i try not to do large txs when i am tired or sleepy"

What G is talking about above is something that 99% of you don’t do (but you definitely should): checking that what the dapp and|or what the browser wallet are displaying is *exactly* the same thing as what you are signing on your HW.

Big emphasis on “exactly”.

For example, you might want to send 100 $DAI to your wife’s boyfriend: you copy-paste his address, you enter “100 $DAI”, you double-check and triple-check everything to make sure you are sending the right amount to the right address, and press “Sign TX”.

The “Review transaction” screen pops up on your @Ledger, so you just go through the motions: RIGHT, RIGHT, RIGHT, RIGHT, RIGHT, LEFT+RIGHT.

But you do not stop to check whether the address displayed by your @Ledger is *exactly* the same as the one you have on file, whether the amount is “100” (and not “1000”, for example), whether you are interacting with the $DAI SC (and you are not sending him 100 $LINK instead).

You just faithfully sign the TX, trusting that you have already triple-checked everything on your PC.

But as G says, that is a recipe for disaster.

The only thing you should trust is your HW. Everything displayed by the dapp you are interacting with or by the browser wallet you are using can be tampered.

A vanity address is an address that has parts of it chosen rather than randomly generated. Adding vanity to an address is used to make it stand out amongst the other (random) addresses, give it personality, reinforce a brand, make the owner(s) feel cool, send a message, etc.

A popular vanity address is 0x000000000000000000000000000000000000dead. Notice the “dead” at the end. It is sometimes used in place of the standard null address, 0x0000000000000000000000000000000000000000

Another popular vanity address most of you have interacted with is the @1inch router, 0x1111111254fb6c44bAC0beD2854e76F90643097d. Notice the 7 “1”s at the beginning.

A new yet popular vanity address that just appeared on the chain is the @ConcaveFi $CNV token address, 0x000000007a58f5f58E697e51Ab0357BC9e260A04. Notice the 8 “0”s at the beginning.

In any case, you get the idea: a vanity address is an address that has parts of it chosen rather than randomly generated.

Do not confuse vanity addresses with .eth (@ensdomains) addresses. Vanity addresses are no different than any other addresses. They just look different to us because hoomans don’t like randomness.

As a #PrudentSpartan, I am sure you check the address you are interacting with on your HW before signing the TX (unlike 99% of CT). But do you check the whole address, or just the first and last few (3-4) characters?

Because you might just be wasting your time in exchange for a false sense of security.

Notice how @MetaMask only shows the first and last few characters of the address, not the entire address. If you check only that with your HW, you are wasting your time for a false sense of security.

You press “Confirm” on the @MetaMask window displayed above. You then see this on your @Ledger. Everything checks out. You sign the TX. I just stole your money!

How?! Besides the main use of vanity to make addresses stand out, there is another, less known (and evil), use case: making addresses blend in.

If you check the chain, you will see that the address you should have interacted with is 0x4678f0a6958e4D2Bc4F1BAF7Bc52E8F3564f3fE4. Instead, the address displayed by your @Ledger was 0x4679E467A5fAe7687bFff70996A9649Be2C13fE4.

Notice how both addresses start and end with the same characters as the ones displayed by your @MetaMask, but they are completely different otherwise. If you only verified what your @MetaMask showed you, you would have lost your money.

Instead of using vanity to create an address that stands out, I used vanity to create an address that blends in. In fact, it only took my laptop 5 seconds (!) to find another address that begins and ends with the same characters that are displayed by @MetaMask for you to check.

My “fake” address is a completely valid address. You can even see its PK in the above SS. If you don’t believe me, try and import it into your wallet. You will see, it works. I used a vanity address generator to create an address that blends in, rather than one that stands out.

And because @MetaMask only shows the first and last few characters, and so you only checked the first and last few characters, I was able to make you interact with another address that just so happens to begin and end the same way you expected it to.

Blockchain Analytics

Various notable addresses and transactions from Etherscan for further research/analysis:

Malicious Contracts:

• The first malicious contract 0x65a8...3b2f was created by wallet 0x5622...781a.
• A malicious CvxLockerV2 smart contract was created by wallet 0xa49A...eF78.

Address of one victim: who's funds were stolen.

Total Amount Lost

Cryptonomist reports that as of June 24th, 2023, "the tally of what the hacker managed to steal is about 220 ETH" however no further information is provided as to how that number was determined by Cryptonomist. The blockchain records of the attacker's known wallet show significantly fewer tokens being received in total.

Convex Finance described in their postmortem that only 3 of the 40 exploited addresses had funds taken from them, and the specific total was 15,968 cvxCRV and 433 CRV. Matching blockchain transactions can be identified for 15,968.95655 cvxCRV and 433.3936 CRV.

"As of today, there are 40 known addresses that approved malicious contracts as a result of this incident. In total, an estimated 15,968 cvxCRV and 433 CRV are suspected of being stolen from users. Only 3 of the 40 addresses listed had funds taken."

While the attacker's wallet does contain additional transactions, it is unclear which specific attack these belong to and most amounts are less substantial. The closing market price of Curve on June 23rd, 2022 was $0.8308, while the closing market price of Convex's cvxCRV token was $0.8285. Combining with the post-mortem information, this results in an estimated total loss of $13,589.22 USD.

Immediate Reactions

On June 23, 2022, the Twitter user @alexintosh reported an abnormal approval requested by the Convex Finance website, with a similar but not exact smart contract address.

"What is this unverified contract? 0xF403a2c10B0B9feF8f0d4F931df5d86aD187AE31. [The] @ConvexFinance website is asking for approval for that but the correct one is 0xF403C135812408BFbE8713b5A23a04b3D48AAE31. 4 Starting/Ending Characters are the same. DNS spoofing?"

The situation was initially reported and detailed by Twitter users @HarukoTech and Bret Woods (@fewture). These users provided a complex analysis of the transactions and a guide on a work around to validate transactions on hardware devices by using smaller transaction fees.

It was quickly realized that multiple protocols were affected by the exploit. A Telegram group was set up for communication between the different affected protocols.

Shortly after this, the Convex Finance team posted to announce that they had restored the domain name to the original settings and provided a list of affected users.

Investigation is still ongoing, but a quick update for the community:

- DNS for http://convexfinance.com was hijacked, prompting users to approve malicious contracts for some interactions on the site.

- Funds on verified contracts are unaffected.

- Issue is remediated at this time, but investigation is ongoing. Full post-mortem to follow.

At this time, 5 addresses seem to have approved malicious contracts (in the tweet below). If you are the owner of one of these addresses, please reach out via Twitter DM or Discord.

However, the nature of DNS is such that propagation of settings requires time and blockchain data shows that the most significant affected user thefts happened after this notice, which described the situation as "remediated".

Ultimate Outcome

The NameCheap CEO ultimately responded on Twitter to explain that there was a hacked or compromised customer support agent and all access was removed from them. He also offered completely free Domain Vault monitoring to all affected services.

"We've traced this down to a specific [customer support] agent that was either hacked or compromised somehow and have removed all access from this agent. This affected a few targeted domains but we will continue investigating." "In the meantime we would like to offer you our Domain Vault service for free and we will also place all affected domains on the highest security monitoring."

Convex Finance posted a finalized list of affected addresses on June 24th.

At this time, the addresses on this list (linked below) are suspected of having approved malicious contracts. Please note this list may or may not be complete.

There was strong criticism from user @flubdubster for Convex Finance using a standard domain registration which doesn't have advanced spoofing protection.

Total Amount Recovered

Convex Finance reported in their post-mortem that they would be covering all losses in full.

"Convex Finance will attempt to compensate losses stemming from the DNS hijacking from June 20–23, 2022, sourced from the treasury, and paid in CVX tokens equivalent to the USD values at time of loss. Funds will go directly to the addresses affected once approvals have been revoked to the malicious contracts."

It is assumed that Convex Finance followed their on their promises and all affected users were compensated fully.

Ongoing Developments

Lost funds were covered for users by the Convex Finance protocol form their treasury. It remains to be seen whether any of the proceeds will be successfully located and recovered from the hackers.

Individual Prevention Policies

There are two policies which apply in this case. See the Prevention Policies for Individuals page for the full list.

Full Prevention

Every approval on Web3 is an opportunity to lose all of the funds present in your wallet. Take the time to review the transaction in full. Fully check over the balance, permissions, and entire address which you are interacting with. Do not trust that your clipboard or any website front-end is guaranteed to provide an accurate address or transaction status. Always perform a test transaction prior to the first high-value transaction in any session.

Limiting Losses

Store the majority of funds offline. By offline, it means that the private key and/or seed phrase is exclusively held by you and not connected to any networked device. Examples of offline storage include paper wallets (seed phrase or key written down and deleted from all electronic media), hardware wallets, steel wallet devices, etc...

Platform Prevention Policies

There are three different policies applying here. See the Prevention Policies for Platforms page for all policies.

Prevention by Namecheap

The issue ultimately stemmed from a single customer support agent being compromised. A multi-signature requirement on DNS changes would have prevented this scenario entirely. While NameCheap offers advanced protections on their domain names, this service had just launched two days prior to the DNS change, so it was unlikely to be a reasonable expectation that Convex Finance would have already signed up.

All wallets, minting functions, and critical infrastructure should be implemented with a multi-signature requirement, with a recommended minimum of 3 signatures required. This means that making important changes or approving spending will require the keys held by at least 3 separate individuals within the organization to approve. The multi-signature should be implemented at the lowest layer possible, all key holders should have security training, and all key holders should be empowered and encouraged to exercise diligence.

Prevention by Convex Finance

All points along the communication and supply chain should be inspected for vulnerabilities. Common vulnerability points may include DNS, Discord, and customer information. What steps are required to access and/or modify the component? Do any third party companies or organizations implement a proper multi-signature approach? What additional security options are available?

Regulatory Prevention Policies

There is one policy to prevent the situation, and one to reduce the impact. See the Prevention Policies for Regulators page for the full list of policies.

Full Prevention Through Security Assessments

All platforms should undergo published security and risk assessments by independent third parties. Two assessments are required at founding or major upgrade, one after 3 months, and one every 6 months thereafter. The third parties must not repeat within the past 14 months. A risk assessment needs to include what assets back customer deposits and the risk of default from any third parties being lent to. The security assessment must include ensuring a proper multi-signature wallet, and that all signatories are properly trained. Assessments must be performed on social media, databases, and DNS security.

Reduction Through Education

Create a standard tutorial and quiz for all new cryptocurrency participants, which is required to be completed once per participant. This tutorial and quiz should cover the basics of proper seed phrase protection, strong password generation, secure two-factor authentication, common fraud schemes, how to detect and guard against phishing attacks, how ponzi schemes work, as well as other risks which are unique to the cryptocurrency space.

This could greatly reduce the effectiveness of a similar fraud to affect those such educated.