Ribbon Finance Malicious DNS Hijack
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About Ribbon Finance
"SUSTAINABLE ALPHA FOR EVERYONE" "Earn yield on your cryptoassets with DeFi's first structured products protocol." "Ribbon Finance is a new protocol that helps users access crypto structured products for DeFi. It combines options, futures, and fixed income to improve a portfolio's risk-return profile."[1]
"Theta Vault, which is a yield-focused strategy on ETH and WBTC. The vault earns yield on its deposits by running a weekly automated options selling strategy. The vault reinvests the yield earned back into the strategy, effectively compounding the yields for depositors over time."[2]
"Ribbon's v1 and v2 Theta Vault contracts are audited[3]. Despite the audits and security measures we have taken, we advice users to exercise caution and to not risk funds they are not willing to lose."[4] Audits were found provided by Quantstamp[5], ChainSafe (2 audits)[6], Peckshield[7], and OpenZeppelin[8]. "We have an ongoing bug bounty on ImmuneFi, with up to $50,000 of bounty. The contracts that are included in the bounty are ETH and WBTC Theta Vaults."
The Reality
While the smart contract operates in a decentralized manner, most users will tend to interact with the contracts using transactions generated by a centralized website. When a domain name is accessed on the internet, a service called DNS is used to point the domain name to an IP address[9].
The Ribbon Finance project used NameCheap for their registrar for their primary website[10]. The procedures at NameCheap were such that support team members were able to override the DNS of the website to point the domain name to a malicious server[11][12][13].
What Happened
The account of a customer support agent for NameCheap was hacked[14].
"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."
| Date | Event | Description |
|---|---|---|
| March 22nd, 2022 | Domain Vault Announced | The first archived appearance of the "Domain Vault" service on NameCheap which costs $19.88/mo and is still "coming soon"[15]. |
| June 24th, 2022 10:01:00 AM | NameCheap Response | NameCheap responds that "We've traced this down to a specific CS 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."[16] |
| 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]"[17] |
| June 24th, 2022 4:16:00 PM | NameCheap Clarifies Hack | NameCheap responds that it "[l]ooks more like [their customer support] person was hacked."[14] |
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
The total amount recovered is unknown.
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
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.
Users of platforms need to be careful and double check any new approval requested by any platform against the proper smart contract address. It is recommended to double check any new smart contract addresses being interacted with.
References
- ↑ Ribbon Finance: Crypto structured products on Ethereum (Oct 12, 2021)
- ↑ Introduction to Ribbon - Ribbon Finance (Dec 4, 2021)
- ↑ audit/RibbonThetaVault V2 Smart Contract Review And Verification.pdf at master · ribbon-finance/audit · GitHub (Dec 4, 2021)
- ↑ Security - Ribbon Finance (Dec 4, 2021)
- ↑ audit/Quantstamp Theta Vault.pdf at master · ribbon-finance/audit · GitHub (Dec 4, 2021)
- ↑ audits/Ribbon-Audit_April-2021.pdf at main · ChainSafe/audits · GitHub (Dec 4, 2021)
- ↑ audit/PeckShield-Audit-Report-Ribbon-v1.0.pdf at master · ribbon-finance/audit · GitHub (Dec 4, 2021)
- ↑ Ribbon Finance Audit - OpenZeppelin blog (Dec 4, 2021)
- ↑ https://www.cloudflare.com/learning/dns/what-is-dns/ (Feb 9, 2023)
- ↑ Post Mortem Of Events June 23 (Aug 24, 2022)
- ↑ @ConvexFinance Twitter (Aug 24, 2022)
- ↑ @DevanCollins3 Twitter (Aug 24, 2022)
- ↑ @LefterisJP Twitter (Feb 10, 2023)
- ↑ 14.0 14.1 @NamecheapCEO Twitter (Feb 11, 2023)
- ↑ Premium domain protection – Domain Vault - Namecheap (Feb 9, 2023)
- ↑ @NamecheapCEO Twitter (Aug 24, 2022)
- ↑ @NamecheapCEO Twitter (Aug 24, 2022)