Hedera hacked for an undisclosed amount

The Hedera Hashgraph platform team reported an unauthorized withdrawal of assets from the Hedera Token Service as a result of a breach by an unnamed mainnet smart-contract service.

Today, attackers exploited the Smart Contract Service code of the Hedera mainnet to transfer Hedera Token Service tokens held by victims’ accounts to their own account. (1/6)

— Hedera (@hedera) March 10, 2023

“The attacker’s targets were the accounts used as liquidity pools on several DEX built on Uniswap v2 code, including Pangolin, SaucerSwap and HeliSwap,” the developers clarified.

The hacker’s transfer of funds was detected by operators cross-chain bridge HashportNetwork and they promptly disabled it.

When the attackers moved tokens obtained through these attacks over the @HashportNetwork bridge, the bridge operators detected the activity and took swift action to disable it. (3/6)

— Hedera (@hedera) March 10, 2023

To prevent further damage, the Hedera team halted the mainnet proxy servers. The network will resume operations once the patched code is deployed.

The developers did not specify how many tokens the attacker managed to steal. PeckShield analysts noted that the platform’s TVL—TVL—fell 33% from $36.1 million to $24.6 million.

#PeckShieldAlert @hedera has reported that they suffered an exploit. The TVL on Hedera has dropped -33% from $36.1M to $24.6M https://t.co/knZfKSUdkg pic.twitter.com/QVmwXq8CPg

— PeckShieldAlert (@PeckShieldAlert) March 10, 2023

SaucerSwap confirmed that the attack vector was the decompilation of Hedera’s smart contracts. According to the exchange’s statement, users’ funds were not affected.

UPDATE: We no longer advise users to withdraw liquidity. SaucerSwap is unaffected.

See here: https://t.co/PVZtlS3yls

— SaucerSwap Labs ? (@SaucerSwapLabs) March 9, 2023

The Hedera token price (HBAR) did not react to the incident. Over the last 24 hours the asset fell 4.7%, roughly in line with market trends. Over the same period Bitcoin fell by 7.7%, the overall cryptocurrency market cap declined by 7.3%.

In September 2022, the Korean electronics company LG Electronics launched an NFT platform built on Hedera.