The Shiba Inu (CRYPTO: SHIB) team posted a detailed account of the hacking incident that impacted its ecosystem on Saturday, including details about the assets affected and subsequent actions taken.
Flash Loan Attack On Shibarium
According to the official X account tied to the SHIB token, the attacker acquired 4.6 million Bone ShibaSwap (CRYPTO: BONE), the governance token of Shiba Inu’s Layer 2 network Shibarium, through a flash loan and momentarily gained validator voting power. This allowed them to push “malicious” software on Shibarium.
Shiba Inu said that without the flash loan, the attacker wouldn’t have achieved the required 2/3 majority.
Flash loans are a type of uncollateralized loan, where assets are borrowed and returned within the same blockchain transaction. They are commonly used for arbitrage, but attackers have been found to use them in conjunction with other techniques to defraud users.
The attacker then repaid the transaction using assets drained from the bridge, specifically 224.57 Ethereum (CRYPTO: ETH), worth $1.03 million, and 92.6 billion SHIB, totaling $1.27 million.
Other ecosystem tokens, such as Doge Killer (LEASH), Shiba Inu TREAT (TREAT) and Shifu (SHIFU) were also impacted but have not been moved or sold at this time, the Shiba Inu team said.
See Also: Millionaire Trader Prefers Dogecoin, Solana ETFs Over XRP As Main Catalysts For This ‘Explosive’ Meme Coin
Steps Taken By Shiba Inu
In response to the attack, Shiba Inu has paused staking/unstaking functions to protect community assets. They also transferred stake manager funds from proxy contracts to a “secure 6/9 hardware multisig” address and partnered with blockchain security firm, including PeckShield, for a full forensic investigation.
Kaal Dhairya, a key figure in the ecosystem, said that they are open to talking to the attacker.
“If the funds are returned, we will not press any charges and are willing to consider a small bounty,” Dhairya added.
Price Action: At the time of writing, SHIB was exchanging hands at $0.00001370, down 3.18% in the last 24 hours, according to data from Benzinga Pro.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
