Friend.Tech clone on Avalanche hacked for $3 million

On October 7, the SocialFi app SocialFi-inspired Stars Arena, inspired by Friend.Tech, lost 266,103 AVAX (about $3 million at the time of the attack) due to a ‘major security breach’ in the smart contracts.

There has been a major security breach with the smart contract.

We’re actively checking the issue.

DO NOT deposit any funds.

Stay tuned for updates.

— Stars Arena (@starsarenacom) October 7, 2023

“We are actively investigating the issue. Do not deposit any funds into the protocol,” the developers warned.

Redline analysts were the first to flag the breach. According to them, the hacker had already withdrawn funds using the FixFloat exchange.

?BREAKING!?

$3 000 000 HAS BEEN GONE FROM STARS ARENA SMART CONTRACT

DO NOT INVEST MONEY IN STARSARENA AT THIS MOMENT

Waiting for an explanation from @starsarenacom pic.twitter.com/5UpP2h6X1Q

— redline (@redlinemeta) October 7, 2023

Later, Stars Arena representatives said they would reimburse the assets lost in the exploit. Temporarily restricting access to the platform, the project team invited security experts to conduct additional checks.

Funds from the initial hot wallet were also moved to a new multi-sig address under the control of the Stars Arena developers.

According to DeFi Llama, the total value of locked assets on the platform collapsed to zero. Presumably this was due to moving coins to another wallet.

Shortly before the attack, the protocol detected a critical vulnerability that could allow attackers to drain AVAX tokens from Web3-social networks’ smart contracts.

Later, Stars Arena said the bug in the getPrice() function had been fixed. At that time, high fees on Avalance prevented hackers from withdrawing the cryptocurrency due to prohibitive costs.

In the wake of the breach, the AVAX price fell 3% over the day—from $10.19 to $9.86, according to CoinGecko.

Earlier this month, Stars Arena, launched in late September, drove growth in activity on Avalance. The number of transactions in the ecosystem jumped from 790,000 to 1.2 million in less than a week.