Nexera burns 32.5m compromised tokens after $440k loss

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As a seasoned researcher with years of experience in the dynamic world of blockchain and decentralized finance (DeFi), I find it both disheartening and fascinating to witness the constant ebb and flow of events in this industry. The recent incident involving Nexera, where 32.5 million NXRA tokens were stolen, is a stark reminder of the risks inherent in DeFi protocols, but also showcases the resilience and adaptability of these projects when faced with adversity.

In an attempt to protect the stability of their system, the decentralized finance protocol Nexera destroyed (or “burned”) the stolen NXRA tokens that had been taken.

According to reports from PeckShield Alert, a leading blockchain security firm, it’s been confirmed that 32.5 million NXRA tokens have been taken out of circulation within the DeFi protocol on a permanent basis.

#PeckShieldAlert ~32.5M $NXRA that was stolen has been burned — PeckShieldAlert (@PeckShieldAlert) August 8, 2024

After the incident on August 7th, identified by forensic company Cyvers as a potential breach, there was a transaction from Nexera’s proxy contract that raised concerns. Preliminary investigations showed that an attacker manipulated the contract to gain additional permissions and subsequently used the withdraw admin function to withdraw approximately $1.5 million in NXRA tokens.

After stealing funds, the hacker attempted to cleanse the money by trading it for ETH and using platforms like Tornado Cash, a typical method in such scenarios for cryptocurrency laundering. However, the Nexera team revealed later that they had successfully frozen 32.5 million NXRA tokens following the security breach.

According to the incident report following the attack, the perpetrator successfully escaped with approximately $440,000 in NXRA tokens.

Additionally, it was found out that the project’s smart contracts within the protocol remained secure, implying that the project will continue using its existing token address. In the near future, the project plans to release a comprehensive report about the incident.

The exploit was included as part of a broader, synchronized assault aimed at numerous initiatives and systems, according to the statement.

Currently, the Nexera team advises their community against participating in trades. This recommendation stems from the fact that both KuCoin and MEXC have temporarily stopped trading and withdrawals of the token. It is said that the hacker interacted with addresses associated with exploits on these two platforms.

In the last occurrence, the decentralized finance (defi) project that went by the name AllianceBlock was affected by an exploit, marking the second time such an event had occurred. This incident led to the theft of approximately 110 million ALBT tokens, which were part of its previous token supply. The vulnerability was found in Bonq, a decentralized lending platform within the project.

Yesterday, a white-hat hacker took advantage of a bug in Axie Infinity’s Ronin Bridge, extracting approximately 4,000 Ether (ETH), equating to nearly $10 million. The hacker utilized a Maximum Extractable Value flaw to empty the funds, but returned them the next day.

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2024-08-08 14:16