On Wednesday night, someone drained funds from multiple cryptocurrency wallets connected to the decentralized finance platform BadgerDAO. According to the blockchain security and data analytics Peckshield, which is working with Badger to investigate the heist, the various tokens stolen in the attack are worth about $120 million.
While the investigation is still ongoing, members of the Badger team have told users that they believe the issue came from someone inserting a malicious script in the UI of their website. For any users who interacted with the site when the script was active, it would intercept Web3 transactions and insert a request to transfer the victim’s tokens to the attacker’s chosen address.
Because of the transparent nature of the transactions, we can see what happened once the attackers pounced. PeckShield points out one transfer that yanked 896 Bitcoin into the attacker’s coffers, worth more than $50 million. According to the team, the malicious code appeared as early as November 10th, as the attackers ran it at seemingly random intervals to avoid detection.
Decentralized finance (or DeFi) systems rely on blockchain technology to let crypto owners perform more typical finance operations like earning interest via lending. BadgerDAO promises users they can “rest easy knowing you never have to give up the private keys for your crypto, you can withdraw anytime you like, and our strategists are working day and night to put your assets to work.” Its protocol allows people who have Bitcoin to “bridge” their cryptocurrency over to the Ethereum platform via its token and take advantage of DeFi opportunities they otherwise might not have access to.
Once Badger became aware of the unauthorized transfers, it paused all smart contracts, essentially freezing its platform, and advised users to decline all transactions to the attacker’s addresses.
Thursday night, the company said it has “retained data forensics experts Chainalysis to explore the full scale of the incident & authorities in both the US & Canada have been informed & Badger is cooperating fully with external investigations as well as proceeding with its own.”
