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Cryptocurrency Startup Loses $8 Million to Hackers
Alex Dobnya
LI.FI protocol suffered another security breach
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According to blockchain security firm PeckShield, Berlin-based cryptocurrency trading aggregator LI.FI has been dried up of 8 million dollars.
In a post on social media platform X, the cryptocurrency startup warned users against interacting with any LI.FI-based applications for now.
The project team is currently investigating a potential exploit.
If you don’t have infinite approvals set up, you’re not at risk. “It appears only users who have manually set up infinite approvals are affected,” he added.
DEX trading platform Oku Trade has announced that it has temporarily disabled LI.FI from Oku Bridge.
This isn’t the first time LI.FI has suffered a security breach. In March 2022, around $600,000 in USDC, MATIC, AAVE and other tokens were stolen from 29 wallets.
In fact, according to PeckShield, this time the bug is “essentially the same,” meaning the project hasn’t learned from previous mistakes.
In 2022, the hacker managed to steal hundreds of thousands of dollars by exploiting the protocol’s prebridge swapping functionality. The funds were stolen in a single transaction. “The attacker started by passing a legitimate swap of a small amount followed by multiple calls directly to various token contracts,” the project explained.
The startup said the attack occurred because of its failure to complete the audit sooner. It added that its security measures needed to be improved “drastically.”
In July 2022, LI.FI raised $5.5 million in funding from companies such as Coinbase and Lattice Capital.
In May 2023, it introduced a decentralized exchange aggregator and a token bridge.
About the author
Alex Dobnya
Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader, and journalist with extensive experience covering everything from price analysis to Blockchain disruption. Alex has written over 1,000 stories for U.Today, CryptoComes, and other fintech media. He is particularly interested in regulatory trends around the world that are shaping the future of digital assets and can be reached at alex.dovbnya@u.today.