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28 November 2021
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DeFi hack attack sees Cream Finance lose $130 million

  • Cream Finance suffers DeFi hack worth $130 million.
  • This is the third time the platform will be hacked this year.
  • Gensler proposes regulation in the DeFi sector. 

Cryptocurrencies have been earmarked to be the game-changer in the world of finance. This is because the assets have a lot of use cases signaling technological advancements in the sector. But while the assets are seen as the next big thing, there are some obstacles it must surmount. One strong obstacle has been the issue of security in the sector. Over the past few years, hackers have had a field day, stealing millions of dollars worth of assets from different platforms. The recent DeFi attack has seen Cream Finance breached. According to reports, the hackers were able to cart away tokens worth $130 million. 

Third Cream Finance hack this year

This is not the first time that Cream Finance would be breached this year. Cream Finance, a lending and borrowing protocol in the DeFi sector, runs on the Ethereum blockchain. In the report released by Parkshield Inc, the cream finance hack was a flash loan attack, resulting in the Los of mostly the native token of the platform, Cream, being stolen.

As mentioned earlier, this is not the first time the platform would be hacked this year, as the first hack saw the illicit actors steal $37.5 million in Cream tokens. As a result of the hack, the asset’s price tanked massively, losing close to 30% of its value in one hour. The second attack occurred in August, which saw the hackers cart away nothing less than 418 million AMP tokens and 1,300 Ethereum tokens. Some hours after the DeFi hack took place, the value of CREAM ran into a loss of about 28%. Presently, the token is reading at $115, according to CoinGecko.

Gensler proposes regulation to tackle DeFi hacks

Although Cream Finance has suffered a worse fate in terms of DeFi hack attacks, it is not the only platform in the pool. August was a sad month for Poly Network, an interoperability protocol, as hackers breached it and stole $600 million in tokens. The Poly Network hack has now eclipsed other hack attacks to become the largest theft in crypto history.

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DeFi hacks like these and others have triggered most of the parties in the market to ask for regulation in the decentralized finance sector. Some weeks ago, the chairman of the United States SEC, Gary Gensler, proposed regulating the industry. According to Gensler, if the sector is not regulated now, it could suffer a worse fate in the future. He said all this and more at the Yahoo Finance Summit, where he was a chief speaker.

Gensler says he wants strong consumer protection laws in the DeFi sector, so the developers and users do not suffer. He noted that a lot of buying and trading is going on in the market without regulatory oversight. Gensler has also classified the term DeFi as a misnomer, pointing out that most of the tokens in the sector might still be unregistered. Should a consumer protection regulation be proposed in the coming months, it could reduce the rate at which DeFi hacks have been rampant in the sector.

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