Abracadabra Project Loses $6.5 Million in Exploit

The DeFi protocol Abracadabra Finance has suffered an exploit resulting in losses of approximately $6.5 million, according to experts from PeckShield.

Hi @MIM_Spell, you may want to take a look (w/ $6.49M Loss) pic.twitter.com/uHs0JweuoM

— PeckShield Inc. (@peckshield) January 30, 2024

Specialists from Blocksec confirmed the project’s loss of “millions of dollars.” They noted the attacks are ongoing and urged protocol users to withdraw their assets as soon as possible.

Immediate action is necessary! Users should withdraw their assets ASAP! https://t.co/boorxklyfO

— BlockSec (@BlockSecTeam) January 30, 2024

The Abracadabra team responded to the incident, stating that the exploit involved “several” Ethereum pools, or “cauldrons,” as they are referred to in the project.

The dollar-pegged stablecoin Magic Internet Money (MIM) temporarily plummeted by nearly 16%.

Following the project’s announcement of the DAO treasury’s intent to repurchase and burn MIM to restore its peg, the asset’s price nearly returned to its nominal value.

We are aware of an exploit involving certain cauldrons on Ethereum.

Our engineering team is triaging and investigating the situation.

To the best of its Ability, the DAO treasury will be buying back MIM from the market to then burn.

More updates are coming.

— ??‍♂️ (@MIM_Spell) January 30, 2024

The native token SPELL’s price remained unaffected by the incident, rising by 0.1% over the day, according to CoinGecko.

Blocksec informed The Block that preliminary analysis suggests an attack on the project’s smart contract. The firm estimated that assets worth approximately $29 million remained at risk at the time of their comment.

According to DeFi Llama, the total value locked in the protocol is nearly $160 million.

In 2023, the crypto industry lost $2.61 billion due to hacks and fraud, according to PeckShield.

Experts from Immunefi reported a lower loss of $1.8 billion.