Velocore Exchange on zkSync Hacked, Suffering Losses of Approximately $10 Million

Bittime - Velocore Exchange on zkSync was hacked, suffering losses of around $10 Million.

The incident was discovered by “Officer Notes”, a hacking researcher. He found this to be true when highlighting vulnerabilities in the crypto sector.

Velocore Exchange on zkSync Hacked, Investigation Underway

Velocore reported that its liquidity provider token was the target of an attack by hackers. The token is an important part of their exchange operations. 

Post the hack, the hackers managed to transfer more than 700 Ethereum (ETH) across the chain to the Ethereum mainnet .

Source: beincrypto.com

Even though Velocore has passed security audits conducted by Zokyo, Hacken, and Scalebit, hackers still successfully exploited weaknesses in the decentralized exchange, according to documents from Velocore.

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At the same time, Linea Blockchain experienced a temporary halt in block production during the attack. 

The shutdown lasted for about an hour before normal operations resumed. The reasons behind this disorder are still unclear.

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Velocore Advanced Actions

Luckily, Velocore Stable Pools was not affected by the attack, so it was still possible to withdraw funds from reserves. 

The Velocore team collaborated with security experts and has contacted centralized exchanges (CEX) and immediately froze the stolen assets, in hopes of minimizing further losses.

This has also been conveyed by Velocore via its X account.

Velocore Exploit Update

We've identified the exploit mechanism and are setting up an on-chain negotiation process. A post-mortem article is in the works. Tracking the exploiter with clues left behind. More updates soon.

Velocore on the Telos mainnet has not been affected, and…

— Velocore | veDEX on zkSync Era / Linea ▪️ (@velocorexyz) June 2, 2024

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Return Claims and Similar Cases

Velocore Exchange on zkSync was hacked, having suffered losses reaching around $10 Million.

As a result, community members who suffered losses due to the attack asked Velocore to return their funds. 

However, to date, the project has not announced any compensation or refund plans.

This incident is part of a broader hacking trend in the crypto sector. Just days earlier, DMM Bitcoin, a Japanese crypto exchange, reported a massive loss of $305 million due to a security incident. 

A series of attacks like this highlight the ongoing challenges when it comes to security in the crypto industry. 

To date, in 2024, excluding losses from Bitcoin DMM, the industry's total losses due to various attacks have reached more than $473.22 million.

In May 2024 alone, the crypto industry has lost more than $52 million through 21 different incidents.

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DISCLAIMER: This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.