Gamma Protocol in Negotiations with Attacker After $3.4 Million USD Hack
A significant breach in the Gamma protocol, a liquidity management protocol on Ethereum, has sent shockwaves through the crypto community. Following a discovery by Peckshield on January 4th, a vulnerability was exposed in Gamma’s treasury, initially estimated to have incurred a loss of 211.9 ETH, roughly $469,000 USD.
However, the situation escalated rapidly as Peckshield confirmed that the Gamma protocol suffered a staggering $3.4 million USD hack. The attackers swiftly moved $2.2 million into Tornado Cash, a tool used to obfuscate assets. Immediately post-hack, Gamma locked the deposit function, restricting users to only withdraw their assets. Remarkably, the protocol reached out to the hacker’s wallet address, aiming to negotiate and incentivize the return of the stolen $3.4 million USD.
— PeckShieldAlert (@PeckShieldAlert) January 4, 2024
Gamma’s representatives clarified that they’ve identified the cause behind the attack and deemed it necessary to halt the deposit function. The project intends to undergo third-party security audits to fortify the protocol before resuming operations.
Additionally, the company emphasized their commitment to compensating affected users, outlining forthcoming plans for restitution. Gamma pledged to disclose the comprehensive recovery roadmap in the coming days.
The hack underscores the vulnerability of decentralized finance (DeFi) protocols despite efforts to fortify security measures. It also highlights the critical need for continual vigilance and robust security frameworks within the burgeoning crypto space.
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