The DeFi world is once again in the spotlight after a newly launched perpetual trading platform, KiloEx
In a new chapter of the persistent struggle against hackers in the DeFi domain, a newly launched perpetual trading platform, KiloEx, backed by YZi Labs (formerly Binance Labs), has fallen victim to a multi-chain exploit, ultimately draining around $7 million in cryptoassets. The incident, first reported by blockchain security firm Cyvers, has brought fresh attention to the vulnerabilities of cross-chain trading platforms.
The exploit, spanning BNB Smart Chain, Base, and Taiko, began on April 14 with an attacker, whose wallet was previously funded via Tornado Cash, engaging in a series of transactions. By exploiting a price oracle vulnerability, the hacker managed to manipulate the price of assets across chains, enabling them to rapidly siphon funds.
The launch of KiloEx, backed by Binance Wallet and PancakeSwap, with its recent Token Generation Event on March 27, had quickly garnered interest in the DeFi space. However, the exploit brought this momentum to an abrupt halt, forcing the KiloEx team to suspend all platform activity.
To mitigate the incident, KiloEx is introducing a bug bounty program in collaboration with Hack Atom, aiming to engage ethical hackers to assist in tracing the stolen funds and identifying the specific vulnerability that allowed the attack.
The incident had an immediate impact on investor sentiment, leading to a 30% crash in the KILO token, erasing $3.5 million in market cap within hours of trading. From a previous valuation of $11 million, the token's market cap now stands at $7.5 million.
The exploit, which spanned April 13 and 14, also affected stablecoins, with the attacker transferring around $6.8 million in USDC to Base after the exploit, further highlighting the multi-chain nature of the incident.
As the investigation progresses, KiloEx is working on fully mitigating the exploit, with the help of blockchain security firm TRM. The incident underscores the criticality of robust access controls, especially for DeFi platforms operating across multiple chains.
