DeFi Protocol Penpie Exploited for $27M of Crypto Assets; PNP Token Craters 40%

Crypto users lost some $2 billion due to hacks, scams and exploits throughout 2023, one report said.

A decentralized finance (DeFi) protocol built on top of tokenized yield platform Pendle was exploited on Wednesday, crypto observers reported.

The alleged exploiter drained roughly $27 million of crypto assets including various types of staked ether (ETH), Ethena's sUSDE and wrapped USDC stablecoin from the protocol, blockchain data shows. Later, it converted the proceeds to ETH using predominantly Li.fi and forwarded the asset to a new address, according to Etherscan data.

The exploiter's address was originally funded with 10 ETH, worth roughly $25,000, via crypto mixer Tornado Cash a few hours before the exploit took place, data shows.

A Penpie representative did not immediately respond to CoinDesk's request for comment by press time.

Pendle confirmed that it identified a security compromise on Penpie's protocol and will maintain close communication with the team. Pendle added that investors' funds are safe on Pendle, but it temporarily paused all contracts as a precautionary measure.

Penpie's token (PNP) cratered following the exploit, declining 40% in total during the day, CoinGecko data shows. Pendle (PENDLE) was down nearly 8% over the past 24 hours, underperforming bitcoin's (BTC) and ETH's 1%-3% decline.

DeFi protocols are prone to hacks and exploits, and Penpie's attack was the latest example of that. Digital asset users lost some $2 billion in scams, hacks and exploits throughout 2023, De.fi reported earlier.