OTSea Gray Hat Group Staking ID Hack

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OTSea Logo/Homepage

OTSea is a peer to peer trading platform, which claims to offer better rates than many of the existing liquidity pools. On September 12th, a gray hat hacking group announced they were attempting a token rescue, and then completed an exploit for $26k worth of tokens. The hacking group announced their intentions to return the funds. There are no indications that funds were not returned. The token was relaunched with an even more deflationary model and this relaunch appears to have been successful.[1][2][3][4][5][6][7][8][9][10][11][12][13][14][15][16][17][18][19][20]

About OTSea

OTSea is a peer to peer trading platform, which claims to offer better rates than many of the existing liquidity pools.

The Reality

"We are GG, Grayhat Group. Heads up, we are attempting a token rescue. Some amount of tokens will be sold in the transaction. We do not intend to sell the rest of the tokens, and this is not a ransom. If we succeed we will send a detailed message. Brenden briefly spoke to a scout we sent to drop some hints about this."

What Happened

"Peer-to-peer trading platform OTSea's staking contract on Ethereum was exploited by an EOA, resulting in the theft of approximately $26,000."

Key Event Timeline - OTSea Gray Hat Group Staking ID Hack
Date Event Description
September 11th, 2024 3:58:35 AM MDT Exploit Test Contract Created The smart contract behind the exploit is created on the Ethereum blockchain.
September 12th, 2024 6:42:47 PM MDT Warning Message Sent A warning message is sent to alert the OTSea team that the Grey Hat Group are about to attempt a token rescue.
September 12th, 2024 6:45:11 PM MDT First Exploit Transaction The first exploit transaction happens on the blockchain.
September 12th, 2024 6:55:47 PM MDT Second Exploit Transaction Another transaction happens which is potentially a second exploit.
September 12th, 2024 7:31:59 PM MDT Taking Too Long A message is sent saying it's taking them a little too long to realize somethign is wrong.
September 12th, 2024 8:15:00 PM MDT CertiK Alert Tweet CertiK posts an alert with details of the repeated exploit which happened, and the gray hat negotiations.
September 12th, 2024 8:26:00 PM MDT CertiK Provides Message CertiK provides the message as a negotiation with the team.
September 15th, 2024 1:20:00 AM MDT OTSea Announcement The OTSea project announces a new "ultra-deflationary" model for their tokenomics, which they are updating "after a vulnerability in the staking contract was discovered, and we are taking the opportunity to move to a simpler burn model". They do not mention that anything was exploited.
September 15th, 2024 10:16:00 AM MDT Off To Great Start OTSea tweets that their deflationary model is off to a great start.

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

The total amount lost has been estimated at $26,000 USD.

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

Immediate Reactions

"@otseaERC20 staking contract on Ethereum has been exploited for ~$26K by eoa: 0x000000003704BC4ffb86000046721f44Ef3DBABe who repeatedly withdraw the same staking id."

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 has been estimated at $26,000 USD.

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?

Individual Prevention Policies

No specific policies for individual prevention have yet been identified in this case.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Policies for platforms to take to prevent this situation have not yet been selected in this case.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No specific regulatory policies have yet been identified in this case.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.

References

  1. ↑ https://web.archive.org/web/20240916181825/https://hacked.slowmist.io/ (Accessed Oct 15, 2024)
  2. ↑ Address 0x000000003704bc4ffb86000046721f44ef3dbabe | Etherscan (Accessed Oct 22, 2024)
  3. ↑ @cryptolab_00 Twitter (Accessed Oct 22, 2024)
  4. ↑ @otseaERC20 Twitter (Accessed Oct 22, 2024)
  5. ↑ @CertiKAlert Twitter (Accessed Oct 22, 2024)
  6. ↑ Ethereum Transactions Information | Etherscan (Accessed Oct 22, 2024)
  7. ↑ Ethereum Transaction Hash (Txhash) Details | Etherscan (Accessed Oct 22, 2024)
  8. ↑ Ethereum Transaction Hash (Txhash) Details | Etherscan (Accessed Oct 22, 2024)
  9. ↑ Ethereum Transaction Hash (Txhash) Details | Etherscan (Accessed Oct 22, 2024)
  10. ↑ Ethereum Transaction Hash (Txhash) Details | Etherscan (Accessed Oct 22, 2024)
  11. ↑ Ethereum Transaction Hash (Txhash) Details | Etherscan (Accessed Oct 22, 2024)
  12. ↑ @CertiKAlert Twitter (Accessed Oct 22, 2024)
  13. ↑ @StefenCrypto Twitter (Accessed Oct 22, 2024)
  14. ↑ @pandaly520 Twitter (Accessed Oct 22, 2024)
  15. ↑ @lunaray_co Twitter (Accessed Oct 22, 2024)
  16. ↑ @0xNickLFranklin Twitter (Accessed Oct 22, 2024)
  17. ↑ OTSea Staking hacked – Defi hack analysis (Accessed Oct 22, 2024)
  18. ↑ @pandaly_team Twitter (Accessed Oct 22, 2024)
  19. ↑ @otseaERC20 Twitter (Accessed Oct 22, 2024)
  20. ↑ https://archive.ph/xfguI (Accessed Oct 22, 2024)
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