As a seasoned analyst with over two decades of experience in the tech and finance industries, I’ve seen my fair share of security incidents, and this latest one involving Clipper is no exception. The fact that the attacker managed to exploit a vulnerability despite Clipper’s claims of having safeguards against private key leaks is concerning, but it’s not entirely unexpected in the fast-paced world of DeFi.
At 4 am UTC on December 1st, the decentralized exchange (DEX), known as Clipper, encountered a security issue that focused on its liquidity pools on both Optimism and Base networks.
Initially, Chaofan Shou, one of Fuzzland’s co-founders, claimed that an exploit occurred due to a private key leak, enabling the attacker to approve deposit and withdrawal transactions. Contrarily, Clipper has denied this explanation, asserting that their security system is constructed precisely to prevent such vulnerabilities from arising.
The Exploit
In my recent analysis as a researcher, I’ve discovered that Clipper’s latest update indicates a loss of roughly $450,000 due to a recent attack. This equates to about 6% of their total value locked (TVL). Fortunately, the attacker’s attempts to exploit other chains were unsuccessful, thus safeguarding both the attacker and the associated pools from any potential impact.
As a researcher, I can confirm that the exploit has been addressed swiftly, with Clipper taking prompt action to secure user assets and delve into the root cause of the breach. For precautionary purposes, all swap and deposit activities across various chains have temporarily halted during this investigation process.
Despite the restrictions, users can still make withdrawals, reflecting Clipper’s non-custodial design where users maintain control over their assets. It’s worth mentioning that at present, all assets in the pool must be withdrawn together. The option to withdraw a single token, previously identified as a vulnerable feature, has been temporarily disabled.
To clear up any confusion about the cause of the incident, Clipper has stated emphatically that it wasn’t due to a private key being leaked. The developers of the Decentralized Exchange (DEX) are currently working closely with security specialists to probe the breach and ensure robust safety measures are put in place for a thorough resolution.
Beyond the ongoing probe, we’re now working to track down the funds with the goal of their recovery. If you happen to be the culprit and feel comfortable sharing information, we invite you to get in touch directly. Clipper values openness and will keep the community informed as additional details emerge.
Hacks Ravage DeFi
Based on the Immunefi report from November 2024, hacking activities accounted for an astonishing 99.96% of all cryptocurrency losses during that month. On the other hand, instances of fraud and rug pulls saw a significant decrease, with only two incidents accounting for a mere $25,300 in losses.
In a blow to the Decentralized Finance (DeFi) industry, it endured losses amounting to approximately $71 million – representing one of the lowest monthly tolls this year and a significant decline from the $343 million loss seen in November 2023.
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2024-12-02 21:38