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Prisma Finance Suffers $10 Million Cryptocurrency Breach

ByDayne Lee

Mar 31, 2024
Prisma Finance Suffers $10 Million Cryptocurrency Breach

The decentralized finance (DeFi) landscape was shaken on March 28, when Prisma Finance fell victim to a cyber-attack, resulting in the loss of approximately $10 million in cryptocurrencies. The breach was first identified by Cyvers, an on-chain security alert service, which promptly reported multiple suspicious transactions linked to Prisma Finance through an X (formerly Twitter) post.

Initial Detection and Response

Cyvers’ alert system proved crucial in the early detection of the anomaly, spotting the malicious contract responsible for the breach a mere two minutes before the fraudulent transactions began. Despite the quick identification, the attacker managed to execute additional unauthorized transactions, pushing the total loss close to the $10 million mark.

In response to the breach, Prisma Finance announced a temporary suspension of its protocol. The team’s core engineers and contributors have embarked on a thorough investigation to understand the breach’s mechanics and prevent future incidents. This decision underscores the protocol’s commitment to security and the safeguarding of user assets.

Prisma Finance at a Glance

Prisma Finance, known for its decentralized liquid staking token protocol, has become a notable player in the DeFi space, boasting over $222 million in total value locked (TVL), according to data from DefiLlama. The platform’s innovative approach to DeFi solutions has garnered attention, making the recent breach all the more significant for the broader crypto community.

Rising Concern Over Hacked Funds

The attack on Prisma Finance is part of a worrying trend in the cryptocurrency world, with Immunefi reporting a 15.4% increase in hacked funds in 2024 compared to the same period in 2023. The attacker’s swift action to convert the stolen assets into Ether has compounded the urgency of addressing security vulnerabilities within DeFi protocols.

Ongoing Threat and Community Caution

The situation remains fluid, with PeckShield, another on-chain security firm, noting that the attack was still in progress as of their last update. The total estimated loss has since escalated to approximately 3,257.7 ETH, equivalent to around $11.6 million. PeckShield’s advisory to vault owners to heed notifications from official sources and remain vigilant against scams highlights the critical need for heightened security measures and community awareness in the face of ongoing threats.

Event DetailDescription
Date of BreachMarch 28
Initial Loss Detected~$9 million
Additional Loss~$1 million
Total Estimated Loss~$10 million
Attacker’s ActionConversion of stolen funds to Ether
Protocol’s ResponseTemporary suspension and investigation
Community AdvisoryWarning against scams and urging caution

The breach of Prisma Finance serves as a stark reminder of the inherent risks associated with the DeFi sector. It underscores the imperative for robust security frameworks and real-time monitoring systems to detect and mitigate such threats promptly. As DeFi continues to evolve and attract more participants, the industry must prioritize the development of more secure infrastructures and the education of users about potential risks and protective measures.

The cyber-attack on Prisma Finance is a significant event that highlights the ongoing challenges faced by the DeFi industry in ensuring the security of digital assets. As investigations continue and the community rallies to support those affected, the incident offers critical lessons on the importance of vigilance, rapid response, and the collective effort required to fortify the DeFi ecosystem against future threats. The resilience of the DeFi community and its commitment to overcoming such obstacles will be crucial in navigating the path forward and maintaining trust in decentralized financial systems.

Featured image credit: Kongbunmee via Getty Images

Dayne Lee

With a foundation in financial day trading, I transitioned to my current role as an editor, where I prioritize accuracy and reader engagement in our content. I excel in collaborating with writers to ensure top-quality news coverage. This shift from finance to journalism has been both challenging and rewarding, driving my commitment to editorial excellence.

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