The Decentralized Finance Protocol (DeFi) Cream Finance is said to have suffered major violations as it lost $ 130 million to hackers, which could be one of the largest stolen sums of money in the growing DeFi area.
Bloomberg reports that the DeFi Cream Finance protocol suffered a major intrusion and lost $ 130 million in arguably one of the largest intrusions into decentralized finance to date. DeFi is a fast growing sector within cryptocurrency, explained Barron’s recently:
Welcome to decentralized finance or DeFi – the new frontier of cryptocurrency and one of its fastest growing areas. DeFi covers leisure markets where thousands of tokens are listed and traded without any central authority control. Other DeFi networks consist of huge lending platforms that are like crowdfunded money markets or trading order books. Users add their cryptocurrencies to the liquidity pool in exchange for commissions paid by borrowers who could trade tokens. Interest rates can exceed 10%, depending on the cryptocurrency and the size of the pool.
He was the first to report the attack Block the crypto cites a PeckShield Inc. tweet that highlighted a large quick loan transaction that appeared to be a source of theft.
– PeckShield Inc. (@peckshield) October 27, 2021
The DeFi industry has seen billions of dollars invested in protocols and platforms in recent years, but it has also been a frequent target of hackers. Many use fast loans, a form of unsecured loan, as a method to take advantage of poorly secured protocols.
Cream fell victim to a similar attack that stole nearly $ 38 million in February and nearly $ 19 million in August. In August, hackers stole $ 600 million in crypto tokens from the PolyNetwork protocol in the largest DeFi intrusion to date.
Stephane Ouellette, CEO and co-founder of FRNT Financial Inc., a cryptocurrency-focused capital markets platform, commented: “This unfortunately highlights one of the three major risks in DeFi at the moment. First, tokens representing very new projects are traded at very large, probably inflated values. Second, the vast majority of platforms are one year old, which means untested technology.
The SEC seems to be working to regulate DeFi protocols and centralized crypto lenders such as BlockFi and Celsius. Both platforms currently have contested regulatory structures in several U.S. states. Cream’s token fell 26 percent to its lowest level since May on Wednesday after the intrusion.
Cream Finance tweeted that it is investigating the intrusion and will share updates when they become available.
We are investigating the abuse of CREAM v1 on Ethereum and will share updates as soon as they become available.
– Cream Finance) (@CreamdotFinance) October 27, 2021
Read more at Bloomberg here.