DeFi Platform Hacked for at Least $1,900,000 and Possibly More on Ethereum and Arbitrum Blockchains

A decentralized finance (DeFI) protocol has been hacked to the tune of millions of dollars over the Ethereum (ETH) and Arbitrum (ARB) blockchains.

In a new announcement, cybersecurity firm Cyvers says that DeFi platform Hedgey Finance has been breached by bad actors who took at least $1.9 million worth of funds that were converted to the stablecoin Dai (DAI).

“Hedgey Finance has experienced a security breach with their Hedgey Token Claim Contract! Total loss is around $1.9 million. Attacker is funded by ChangeNOW_io. All stolen funds are swapped to DAI and transferred to an [external address].”

According to Hedgey Finance, users should be canceling active claims related to the Hedgey Token Claim Contract, which allows users to create token claims for recipients while having greater control over when claimed tokens are unlocked.

“Security Alert: We’re investigating an attack on the Hedgey Token Claim Contract. If you have created active claims, please cancel them using the ‘End Token Claim’ button. We are actively working with our auditors and team to understand the attack and stop any ongoing attack. We will share more information as we learn more.”

However, citing a since-deleted X post from Cyvers, on-chain analyst Colin Wu says that Hedgey suffered a significantly larger loss totaling over $44 million.

“According to Cyvers Alerts, the on-chain token infrastructure protocol Hedgey suffered an attack on the Arbitrum and lost about $42.8 million, and suffered the same attack on the Ethereum and lost about $1.9 million.

Hedgey’s official Twitter account issued a security alert, saying that it is investigating the attack on the contract.”

Featured Image: Shutterstock/Prince Zaleski/AtlasbyAtlas Studio