Hacker Exploits Transit Swap and Steals $23 Million – Here’s Everything You Need to Know
Decentralized exchange (DEX) aggregator Transit Swap had lost $23 million in a hack - before $16.1 million was returned.
Another day, another decentralized finance (DeFi) hack. This time around, the target was Transit Swap, which confirmed on Sunday that a hacker had managed to exploit "a bug in the code."
Per the crypto security firm SlowMist,
The "team analyzed and assessed the size of the stolen funds to be over $23 million."
Notably, an arbitrage bot seems to have front-run the hacker during a transfer. Arbitrage bots are computer programs that use market information to make trades. Meanwhile, a front-running bot can scan pending transactions in milliseconds and pay higher gas fees for miners to process their transactions first.
However, the DEX aggregator team said that, thanks to a number of security teams - naming SlowMist, PeckShield, Bitrace, and TokenPocket - Transit Swap quickly gathered information on the hacker.
They tweeted that,
"We now have a lot of valid information such as the hacker's IP, email address, and associated on-chain addresses. We will try our best to track the hacker and try to communicate with the hacker and help everyone recover their losses."
The team said that they would share more details on the incident "as soon as possible."
SlowMist, however, in their report wrote that the root cause of the attack is that the Transit Swap protocol "does not strictly check the data passed in by the user during token swap, which leads to the issue of arbitrary external calls," concluding that,
"The attacker exploited this arbitrary external call issue to steal the tokens approved by the user for Transit Swap."
70% of the funds returned
Just hours after the incident was confirmed by Transit Swap, they announced that, "with the joint efforts of all parties, the hacker has returned about 70% of the stolen assets" to two addresses on Ethereum (ETH) and BNB Smart Cain.
That said, the team decided to move the funds.
Based on the $23 million number provided by SlowMist, around $16.1 million has been returned by the hacker.
These amounts seem to be confirmed by EtherScan and BscScan, which show millions in ETH and BNB had been taken.
Will the users be compensated?
No compensation plan has been shared so far, but the team claimed that they are working to "formulate a specific return plan."
In their latest update by the time of writing, Transit Swap said that the security companies and project teams are still tracking the incident and are communicating with the hacker "through email and on-chain methods."
They added that they will "continue to work hard to recover more assets."
Per the update, the project team is gathering the data on the affected users, and they aim to return the stolen funds to the users.
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