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21 May 2024
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Blockchain

Sonne Finance Exploited of $20M, Hacker Initiates Stolen Funds Transfer

Sonne Finance Exploited of $20M, Hacker Initiates Stolen Funds Transfer

  • Using the known donation attack, the hacker was able to breach the protocol.
  • A portion of the stolen funds—$7.8M—has already been transferred to another wallet.

Approximately $20 million was lost due to an exploit that hit the decentralized lending protocol Sonne Finance on Wednesday morning in Asia.

According to the project’s post-mortem analysis, an exploit was found in one of the Compound v2 forks. Using the known donation attack, the hacker was able to breach the protocol for approximately $20 million in WETH, Velo (VELO), soVELO and Wrapped USDC (USDC.e). Sonne Finance published on X that it has halted all Optimism markets in reaction to the assault, but Base markets were left running.

After blockchain security company PeckShield issued a warning on X and recommended Sonne to review their timelock contract, Sonne Finance followed suit. The group went on to say that it was 25 minutes after the exploit that it discovered the problem. In the post-mortem, the team detailed how it had just approved a plan to integrate VELO markets to Sonne.

The team stated:

“We scheduled the transactions on multisig wallet, and because there is 2 days timelock, we also scheduled c-factors to be executed in 2-days. The exploiter executed 4 of the transactions when 2-day timelock ends for the creation of markets, and after that, executed the transaction for adding c-factor to the markets.”

Portion of Stolen Funds on the Move

According to Sonne, the inquiry into the identity of the exploiter is ongoing, even if they were unable to preserve the funds. While remaining tight-lipped, the initiative announced its readiness to pay a bounty to the exploiter in return for funds.

Nonetheless, it seems that the hacker is not in the mood to negotiate. A significant portion of the stolen funds—$7.8 million—has reportedly already been transferred to another wallet address, as reported by blockchain investigator PeckShield.

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