On May 28, an unknown hacker breached the DeFi protocol Ede Finance on the Arbitrum network for $580,000. They left an on-chain message claiming that the developers manipulated prices.
Seems @ede_finance has been exploited for around $580,000
This wallet has been sending smalls funds to the ELP-1 pool in Arbitrum and withdrawing big amounts immediately afterhttps://t.co/h8eUaPeHXk pic.twitter.com/nFPwrNMtsh
— Res (@resdegen) May 29, 2023
The hacker described himself as a “white hat” and said the aim was to expose the project’s administrators. He alleged that the core team had a backdoor enabling them to liquidate any user trade, artificially distorting the asset’s price.
The hacker added that he was prepared to return the stolen funds minus 10% as a reward if the developers admitted price manipulation. He also noted further vulnerabilities in the project.
On May 30, representatives of Ede Finance sent a counter-message admitting their guilt.
Yes, we acknowledge that we made a reckless decision to manipulate the price. However, our intention was to blacklist those who previously exported the system, fully aware that all transactions are recorded on the blockchain. We did not intend to illegally appropriate users’ funds, as that would leave a traceable record,” said the project team.
The developers pledged to remove the smart contract that allowed price manipulation. They agreed to the terms of returning stolen assets, adding that they would cover the difference from their own funds.
In Ede Finance they also offered the hacker 5% of the protocol team’s token allocation in exchange for information about other vulnerabilities.
According to CoinGecko data, the native token price of the EDE protocol plummeted by 46% over the past 24 hours — from $2.43 to $1.29.
In May 2023, unknown withdrew assets from the DeFi protocol Deus Finance worth $6 million.
In the same month, hackers attacked the Jimbos Protocol, resulting in unknown users withdrawing more than $7.5 million.