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Prisma Finance Suffers $11 Million Hack Involving FixedFloat Exchange

Prisma Finance, a prominent decentralized finance (DeFi) protocol, fell prey to a sophisticated breach linked to the FixedFloat exchange, leading to a staggering loss of $9 million.

The protocol’s team has acknowledged the security breach and promptly suspended the DeFi protocol’s operations to conduct a thorough investigation into the attack.

Prisma Finance Hit by $11 Million Exploit, Security Firms Confirm

As per Cyvers, a Web3 cybersecurity firm which initially flagged suspicious transactions concerning Prisma Finance, the perpetrator, purportedly backed by FixedFloat, conducted multiple transactions resulting in the theft of 1,965.39 wrapped staked Ethereum (wstETH), initially valued at approximately $9 million.

The blockchain security company PeckShield confirmed the breach, identifying Prisma mkUSD and wrapped stETH among the assets pilfered.

Consequently, the attackers converted these assets into Ethereum (ETH), showcasing a deliberate and targeted strategy to exploit vulnerabilities within the platform.

In the wake of the initial alert, PeckShield issued another advisory on X, revealing an additional $1 million in fraudulent transactions, escalating the total stolen funds to nearly $11 million. They stated, “the attack is ongoing, with the total loss now increased to ~3,257.7 ETH (worth ~$11.6 million).”

PeckShield cautioned vault owners to maintain vigilance and adhere to official notifications to thwart scams. Furthermore, they highlighted the presence of other malevolent actors seeking to capitalize on the situation, flagging a fraudulent Prisma Finance account adorned with a golden badge attempting to deceive users with a dubious link.

Prisma Finance Responds to Possible Exploit as DeFi Sector Continues to Face Challenges

In response, Prisma Finance took to X to engage with its community, providing an update on the situation. The protocol announced that its core engineers and contributors would temporarily halt operations to conduct a comprehensive investigation. Additionally, Prisma urged its users to revoke all connections as a precautionary measure against potential fund losses.

It’s worth noting that Prisma Finance is a decentralized liquid staking token protocol boasting a total value locked (TVL) exceeding $222 million, as reported by DefiLlama.

According to a report from Immunefi, a Web3 bug bounty and security services platform, the crypto industry incurred losses totaling $336.3 million due to hacks and scams during the first quarter.

Immunefi highlighted that DeFi platforms, constituting nearly $100 billion of the total value locked in Web3 protocols, remain prime targets for hackers. Interestingly, all exploits identified by Immunefi in Q1 targeted DeFi, whereas centralized (CeFi) platforms experienced zero exploits during the same period.

Despite the substantial losses, $73.9 million (22%) of the stolen funds were successfully recovered from seven exploits. Moreover, attacks saw a 17.6% decrease, dropping from 74 in Q1 2023 to 61 in Q1 of this year.

While the reported $336.3 million in losses remains significant, it reflects a notable 23.1% decrease compared to the losses of $437.5 million reported in the same quarter last year.

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Cryptocurrency is essentially virtual money that operates in a decentralized manner, not through a bank but directly on multiple independent computers.

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