Hacker Drains $100 Million From DeFi Service Mango
According to multiple reports, a hacker stole over $100 million from the Solana-built decentralized trading platform, Mango. The platform tweeted that the hack resulted from price manipulation of its governance token, MNGO. The platform’s Twitter page revealed that the exploit started with the hacker funding two USDC stablecoin accounts.
Then, he took a significant position in Mango perpetual futures to cause a spike in MNGO tokens. These led to huge unrealized profits in the token’s futures. Then, he used the unrealized gains to borrow and withdraw about $100 million worth of crypto tokens from the protocol. Thus, wiping off all depositor’s tokens from the Mango protocol.
However, the platform said it had received communication from the hackers, who were willing to negotiate. The exploit is the newest among the long list of exploits in several DeFi protocols, resulting in multi-million-dollar losses. It also exposes the security weaknesses of many decentralized exchanges (DEXs).
Many DEXs allow crypto traders to have direct communication with each other without any supervision. This lack of an intermediary makes DEXs different from centralized exchanges, where a central entity is in the custody of user funds. Hence, it is no wonder that some hackers can exploit this loophole and carry out their nefarious activities.
Crypto enthusiast and GMEX Group CEO Hirander Misra stated that DEXs still lack maturity in evolution and come with several security loopholes. Misra added that there are more than 100 public blockchains with different modes of operation.
He argued that there should be an agreed standard of operations. He also said their decentralized nature means no regulation or investor protection. In its analysis of the Mango exploit, BlockSec, a crypto-security firm, stated that the hacker exploited the chance of leveraging up positions on the platform.
Hacker Speaks Up
Meanwhile, the hacker has proposed to Mango that they are willing to negotiate. They posted his proposal on the platform’s governance page. They stated that they were ready to return part of the money but would like to receive a bounty reward. They included other conditions to facilitate the refund. They want the platform not to perform criminal probes or freeze depositors’ funds.
They also want the platform to pay off its bad debts. Following the incident, the platform has disabled deposits and would only enable them once it resolves the issue amicably.
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