Euler Finance hacked for over $195M in a flash loan attack

Euler Finance was exploited in a flash loan attack that drained hundreds of millions of decentralized stablecoins and synthetic ERC-20 tokens.

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Ethereum-based noncustodial lending protocol Eurler finance faced a flash loan attack on March 13, with the attacker managing to steal millions in Dai (DAI), USD Coin (USDC), staked Ether (StETH) and wrapped Bitcoin (WBTC).

According to on-chain data, as per the last update, the exploiter carried out multiple transactions, stealing nearly $196 million. The ongoing attack has already become the largest hack of 2023. The breakdown of stolen funds is as follows:

According to crypto analytic firm Meta Seluth, the attack correlates with the deflation attack one month ago. The attacker used a multichain bridge to transfer the funds from the BNB Smart Chain (BSC) to Ethereum and launched the attack today.

ZachXBT, another prominent on-chain sleuth, reiterated the same and said that the movement of funds and the nature of the attack seems quite similar to black hats that exploited a BSC-based protocol last month. After exploiting a protocol on BSC, the funds were deposited to the crypto mixer, Tornado Cash.

The stolen funds are currently sitting in the following hacker addresses:

0xebc29199c817dc47ba12e3f86102564d640cbf99 (Contract) – 8,877,507.34 DAI
0xb2698c2d99ad2c302a95a8db26b08d17a77cedd4 – 8,080.97 ETH
0xb66cd966670d962c227b3eaba30a872dbfb995db – 88,752.69 ETH & 34,186,225.91 DAI

Euler Finance acknowledged the exploit and said they are currently working with security professionals and law enforcement to resolve the issue.

We are aware and our team is currently working with security professionals and law enforcement. We will release further information as soon as we have it. https://t.co/bjm6xyYcxf

— Euler Labs (@eulerfinance) March 13, 2023

Euler Finance raised $32 million in a funding round last year that saw participation from FTX, Coinbase, Jump, Jane Street and Uniswap.

Euler Finance became quite popular for offering liquid staking derivatives (LSDs) services. LSDs are a relatively new type of token that enable stakers to augment potential returns by unlocking liquidity for staked cryptocurrency, such as Ether (ETH). Currently, LSDs make up to 20% of total value locked in decentralized finance protocols.

This is a developing story, and further information will be added as it becomes available.