edgey Finance, a token infrastructure platform, has been hit by a massive crypto theft amounting to approximately $44.5 million. The funds were stolen within just two hours from platforms operating on Ethereum’s layer-2 network Arbitrum and the Binance Smart Chain.

Details of the Theft

According to a detailed analysis by blockchain security firm Cyvers, the theft was executed through an exploit of the “createLockedCampaign” function within Hedgey’s protocol. The attacker used flash-loaned funds to extract digital assets from the platform. The initial theft involved the transfer of $1.9 million to the DAI stablecoin, which was then moved to an external address. The vulnerability was later exploited on the Arbitrum chain, where an additional $42.8 million was stolen.

Response and Investigation

Following the discovery of the breach, Cyvers attempted to contact Hedgey Finance but initially failed to receive a response. The security firm has emphasized the importance of open collaboration between decentralized applications (dApps) and security firms to mitigate risks and rebuild trust. In response to the incident, Hedgey Finance has launched an investigation and has been working with auditors to understand the attack and prevent further exploits. They advised users with active claims to use the “End Token Claim” feature on their website to protect themselves from potential losses.

Implications and Market Impact

The theft had immediate repercussions on the market value of BONUS tokens, the native digital asset of BonusBlock, which saw a drop of about 10% following the incident. The attacker has also begun moving stolen assets, including over 200,000 BONUS tokens valued at $110,000 to the Bybit exchange, indicating attempts to liquidate the illicit gains.

Increasing Need for Enhanced Security Measures

The theft at Hedgey Finance underscores the ongoing vulnerabilities in the DeFi ecosystem and the need for enhanced security measures. As digital asset platforms continue to grow, the integration of robust security protocols and real-time monitoring will be crucial in safeguarding user funds and maintaining trust within the crypto community. Meanwhile, Hedgey Finance remains committed to resolving the security issues and updating its users as further details emerge.

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