Mark Weaden
We’ve seen a variety of cryptocurrency hacks and scams taking place this year, with Axie Infinity losing $600 worth of assets, and now it’s another compound fork that has incurred a reentrancy hack, with the attacker siphoning off $80 million.
The victim of the scam was decentralized finance (DeFi) lending company Rari Capital, with the attack taking place over the weekend. The industry has encountered regular hack attempts in the last few years, as the industry has edged towards mainstream adoption.
Fei Protocol, which is a stablecoin for DeFi, merged with Rari Capital last year and has offered a heft reward of $10 million to the hackers if the stolen funds are returned. This has often been the plan for companies that have fallen victim to scams and hackers, but it remains to be seen if the hackers will return the funds to Rari.
What Happened And What’s Next?
There was much speculation as to how the hackers found a vulnerability in the Rari Capital system, but blockchain security resource PeckSheild highlighted the “old reentrancy bug.” The losses incurred are significant, even for the highly liquid cryptocurrency industry.
Block Sec, a company designed to offer security to the decentralized world, confirmed the hacker had targeted a variety of different Rari Capital and Fei Protocol pools, as well as confirmed the exact amount of funds that were siphoned by the hacker.
In response to the attack, Jack Longarzo stated that the Rari team had put the brakes on borrowing in light of the attack. Longarzo wanted to reassure Rari Capital customers about the security of the system and assured users that the team is working around the clock to mitigate the losses and recover exploited funds.
To further put the customers’ minds at ease, Longarzo confirmed that the project had already started to review the issue and is working towards a fix. It’s imperative any vulnerability is patched up, which has been done in collaboration with security engineers from Compound Finance.
What Happened To Rari Capital On The Market?
The capital has a native token, known as the Rari Governance Token (RGT), which has taken a hit since the announcement of the hack. With the price taking around a 6% price drop in the last 24 hours, the price of RGT now hovering around $10.75.
Having said that, the whole crypto market has taken a hit in the last week or so, with the price of Bitcoin (BTC) dropping to as low as $37,000. It remains to be seen what will happen to the price of RGT as the market picks up.
