Seneca

DeFi

Axie Infinity

Security

Decentralized finance (DeFi) lending platform and stablecoin issuer Seneca Protocol has been exploited, according to a Feb. 28 statement on the protcol’s official X account. In a report seen by Cointelegraph, blockchain analytics firm CertiK estimated the losses at $6.4 million so far.&nbsp;The Seneca team urged users to revoke approvals for the affected contracts. Its staff are “currently working with security specialists to investigate the bug,” they stated.
<blockquote class="twitter-tweet">
 We are actively working with security specialists to investigate the approval bug found today. In the meantime, REVOKE approvals for the following addresses:<a href="https://twitter.com/hashtag/Ethereum?src=hash&amp;ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">#Ethereum</a> PT-ezETH 0x529eBB6D157dFE5AE2AA7199a6f9E0e9830E6Dc1 apxETH 0xD837321Fc7fabA9af2f37EFFA08d4973A9BaCe34…— Seneca (@SenecaUSD) <a href="https://twitter.com/SenecaUSD/status/1762886130561630227?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">February 28, 2024</a>
</blockquote>
Seneca Protocol is a DeFi lending app that allows users to deposit a variety of cryptocurrencies as collateral, which then can be used to mint and borrow the protocol’s native stablecoin, SenecaUSD.
Blockchain data shows that an account ending in 42DC was able to <a href="https://etherscan.io/tx/0x23fcf9d4517f7cc39815b09b0a80c023ab2c8196c826c93b4100f2e26b701286" target="_blank" rel="noopener noreferrer nofollow">transfer</a> approximately 1,385.23 Pendleton Kelp restaked Ether (PT Kelp rsETH) from a Seneca collateral pool, which it did by calling the “performOperations” function. The account subsequently swapped these tokens for approximately $4 million worth of Ether (ETH) over the course of three transactions. After these swaps, the account transferred an additional 717.04 ETH derivative tokens from various collateral pools and swapped them for ETH.
<figure><img src="https://s3.cointelegraph.com/uploads/2024-02/a315839d-ee79-4d2e-8941-f6a659a76989.png">
 <figcaption style="text-align: center;">Seneca attack transactions. Source: Etherscan.
 </figcaption>
</figure>
In its report, CertiK claimed that these transfers were malicious. They were made possible because the protocol contains a flaw in its “performOperations” function, the report stated. The bug allows any account to call the function while specifying OPERATION_CALL as the action to be performed. This allows the attacker to “perform external calls to any address as the callee and callData are fully controlled by the attacker.” As a result, the attacker was able to drain funds from the collateral pool that it didn’t own, CertiK claims.
Blockchain investigator Spreek also <a href="https://twitter.com/spreekaway/status/1762857769714012217" target="_blank" rel="noopener noreferrer nofollow">warned</a> users about the exploit on X, stating that it represented a “critical vulnerability.” Spreek suggested that users <a href="https://twitter.com/spreekaway/status/1762857944721363331" target="_blank" rel="noopener noreferrer nofollow">should</a> revoke approvals of the addresses used in the exploit.
Related: <a href="https://cointelegraph.com/news/serenity-shield-sersh-token-drops-99percent-after-wallet-hack" rel="noopener noreferrer nofollow">Serenity Shield’s token falls nearly 99% after MetaMask wallet breach</a>
According to security researcher ddimitrov22, Seneca is suffering from an additional vulnerability that prevents developers from pausing the Seneca contracts, as the pause and unpause functions in them contain the keyword “internal,” which means “there is no way to call them.”
<blockquote class="twitter-tweet">
 The Seneca protocol is hacked and it cannot be paused even though it inherits the Pausable library. This is because the `_pause` and `_unpause` functions are internal and there is no way to call them. <a href="https://t.co/en0qIsayMX" rel="noopener noreferrer nofollow">pic.twitter.com/en0qIsayMX</a>— ddimitrov22 (@ddimitrovv22) <a href="https://twitter.com/ddimitrovv22/status/1762886306420379864?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">February 28, 2024</a>
</blockquote>
In its post acknowledging the attack, the development team stated that they are conducting an investigation and will post an update “shortly.”
Hacks and exploits continue to threaten Web3 users in 2024. On Feb, 23, Axie Infinity co-founder Jeff “Jihoz” Zirlin <a href="https://cointelegraph.com/news/axie-infinity-co-founder-wallet-hack" rel="noopener noreferrer nofollow">lost $9.7 million</a> from a hack of his personal wallets. On the same day, DeFi protocol Blueberry <a href="https://cointelegraph.com/news/defi-protocol-blueberry-pauses-after-exploit" rel="noopener noreferrer nofollow">was exploited for 457 ETH</a>.

Decentralized lending platform Seneca exploited for $6.4M

Cointelegraph

Other articles published on Feb 29, 2024

Vanguard CEO to Retire, Will The Firm Rescind its Anti-Bitcoin ETF Policy?

Surge in Dogecoin Value Captures Market Attention

Clone Launches Public Mainnet, Introducing SUI to Solana’s Ecosystem for the First Time

Bitcoin ETFs surge to a record $7.7B in trading, doubling previous highs

Shiba Inu Lead: New PartnerShib Massive for SHIB

Memeinator Smashes Past the $5m Mark

Join our free newsletter for daily crypto updates!