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Linea Resumes After Hack on Velocore DEX Drains $10M – Crypto News

Published

1 year ago

June 2, 2024

Dripp

The decentralized exchange (DEX) Velocore which is built on the zkSync and Linea blockchains was hacked and around $10 million was drained. The Linea blockchain stopped functioning briefly but has since resumed normal operations.

Velocore DEX Security Breach and Immediate Actions

The hack affected Velocore’s liquidity provider tokens which are essential for its functions, and as a result, more than 700 ETH was transferred to the Ethereum mainnet. Prior to the incident, Velocore had been subjected to security audits by companies like Zokyo, Hacken, and Scalebit.

In response, the Linea blockchain stopped block production for approximately one hour to address the issue and mitigate the impact. This disruption shows that there are still weaknesses in the blockchain technologies even with all the security measures put in place.

Breaking: DEX Velocore on zkSync and Linea is suspected to be hacked, and all users’ LPs were stolen, involving $10 million. Linea once stopped producing blocks but has now resumed. Hackers have transferred part of the ETH across chains to the Ethereum mainnet.
H/T @officer_cia…

— Wu Blockchain (@WuBlockchain) June 2, 2024

Since the incident, Velocore has been collaborating with security professionals and CEXes to halt the movement of the stolen funds to prevent further consequences. Their team has also developed an on-chain negotiation mechanism and is working on a detailed post-mortem analysis of the breach and its actions after the intrusion.

Continued Operations and User Protection

This has, however, not affected the stable pools of Velocore, and there is no risk of loss of funds from these pools. The DEX’s action plan involves continuous processes of identifying the culprits and ensuring the safety of user funds.

However, the Velocore operations on the Telos mainnet have not been impacted, and the features have been turned off for a short period as a preventive measure. It also guarantees that all the users’ funds can be safely withdrawn and cooperates with the foundation to bring back the full functionality and security.

This incident is part of a concerning trend in the crypto space, where platforms that have been through numerous security reviews can still be penetrated by well-coordinated hacks. It comes in the wake of the $305 million loss by DMM Bitcoin and brings the total losses in the crypto space in 2024 to over $473 million.

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