Cream Finance Suffers $37 Million Hack

ByTroy Morris

Feb 14, 2021

Even though hacks in the decentralized finance sector is not as rampant as it used to be in previous months, it does not mean that the sector had been rid of malicious acts. In a recent exploit that saw the malicious actors cart away nothing less than $37 million from a protocol, the native token price crashed considerably.

The lending protocol in question saw its token price, known as C.R.E.A.M, move from $288 to $193 in under an hour following the flash loan attack that rocked it. Even though the other of the token has stabilized to sell at $223, the protocol would need to act fast if it wants to recover part or all of its funds.

Protocol says it is already looking into the hack

Even though the protocol is yet to make the details of the exploit live, a statement has been released acknowledging that a potential breach took place. After two hours of releasing the statement, Alpha Finance, another decentralized protocol in the sector, announced that it has also suffered a security breach, even though details have not been made public.

“We have been told of a potential breach in our systems, and we will be looking into it right away. Thank you all for your support in this time,” Cream Finance said. In the details of the attack made available by a private investigator, Igor Igamberdiev said that the hackers were skilled in the act as they took nothing less than $37 million. He noted that the hacker used the normal flash loan attack, but this time, they used a multi-step type of attack, which saw Cream Finance fall victim to it.

He noted that the hackers took loans from different lending protocols and sent them straight into Cream Finance’s lending platform known as Iron bank. Recently, Cream Finance made an update to the Iron Bank, which would allow investors to borrow for free without the need to pay collateral from Alpha Finance.

Flash loan attacks are still the most rampant hack in the DeFi sector

Even though both entities have given not so many details, they have since come out to mention that their systems are working normally. Alpha Finance released a statement confirming that the loophole that the hacker exploited has been repaired, while Cream Finance said that everything with respect to its protocol is working normally. While this shows that the protocols are always quick to repair any breach, it still shows that most of their protocols are not very secure.

Flash loan attacks is a famous hacker that the DeFi sector has had to contend with, going by the lost recent one that took place last year December. The protocol in question, Warp Finance, saw about $7.7 million in stablecoin stolen from its confines as the hackers wreaked havoc. Compound also suffered an $89 million hack in the last few weeks, which shows that the sector still needs work security wise.

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