Approximately $46 million in various cryptocurrencies have been siphoned from the decentralized KyberSwap exchange in a recent exploit within the decentralized finance (DeFi) space.
On November 23, the Kyber Network team issued a warning to its users through a Twitter post, revealing that KyberSwap Elastic had fallen victim to a security breach.
As a precautionary measure, they urged users to withdraw their funds and assured them that an investigation into the incident was underway.
Blockchain enthusiasts and investigators quickly identified the wallet addresses affected by the attack and those belonging to the exploiter, which were still active at the time of discovery.
According to data from Debank, the exploit resulted in the theft of approximately $46 million, including roughly $20 million in Wrapped Ether (wETH), $7 million in wrapped Lido-staked Ether (wstETH), and $4 million in Arbitrum (ARB).
These stolen funds were spread across multiple blockchain networks, including Arbitrum, Optimism, Ethereum, Polygon, and Base.
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In a separate post, blockchain investigator Spreek expressed confidence that the issue was not related to approval permissions but rather connected to the Total Value Locked (TVL) in the Kyber pools themselves.
The attacker left an on-chain message for protocol developers and DAO (Decentralized Autonomous Organization) members, indicating their willingness to engage in negotiations once they were fully rested.
As a result of the hack and user withdrawals, KyberSwap’s Total Value Locked (TVL) plummeted by 68% within a few hours, with nearly $78 million exiting the protocol.
Its current TVL stands at $27 million, a significant drop from its peak of $134 million in 2023.
Following the news of the exploit, the Kyber Network Crystal (KNC) token experienced a brief 7% decline in price but has since recovered to trade at $0.74.
It’s worth noting that the Kyber Network team had identified a vulnerability back in April and had advised users to withdraw their liquidity. Fortunately, no funds were lost in that incident.
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