Recent on-chain analysis indicates that KyberSwap, a decentralized exchange protocol, has been compromised, resulting in the loss of approximately $47 million. The affected assets were part of the protocol's Elastic Pools liquidity feature.
The unauthorized transfer of funds was initially detected by a user named Spreek on platform X, who noticed a significant movement of assets from KyberSwap-associated wallets to a singular wallet. The stolen assets encompass a diverse range of cryptocurrencies, including $20.7 million in Arbitrum, $15 million in Optimism, $7 million in Ethereum, $3 million in Polygon, and $2 million in Base.
A substantial part of the stolen funds comprises various forms of ether, including wrapped tokens and liquid staking tokens. Other cryptocurrencies such as arbitrum (ARB) and multiple stablecoins were also part of the heist.
KyberSwap issued a warning on platform X about a "security incident" involving KyberSwap Elastic and urgently advised users to withdraw their funds. The team at KyberSwap confirmed their ongoing investigation and pledged regular updates.
The alleged attacker, in a message attached to one of the transactions, wrote: “Dear Kyberswap Developers, Employees, DAO members and LPs, Negotiations will start in a few hours when I am fully rested. Thank you.”
KyberSwap Elastic is known for allowing liquidity providers to select their preferred price ranges and benefit from automated yield compounding.
0xngmi, a crypto data site DefiLlama's pseudonymous employee, shared insights on X, indicating that the exploit might not be related to an approval issue with Kyber's aggregator. Instead, the hacker seemed to target the liquidity provider pools directly. He also noted that the protocol's total value locked, which stands at $72 million, remains unaffected.
Adam Cochran, a general partner at Cinneamhain Ventures, also commented on the incident on X, suggesting that the exploit involved flash loans and possibly a mathematical or rounding error. He observed that each affected transaction started with an ETH balance, followed by a series of mint, redeem, and swap actions.