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first-generation decentralized exchange (DEX) was forced to suspend trading on July 9 after it suffered a security breach that resulted in the loss of around $40 million worth of cryptocurrency.
GMX V1, which first launched on the Arbitrum
However, that pool was emptied after an attacker exploited a flaw in the system, which rendered GLP holders unable to redeem their tokens for the expected value.
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Data on GMX’s website showed that roughly $10 million in each Bitcoin
Suhail Kakar, a developer at TAC, explained on X that the exploit was a type of “re-entrancy” attack, where the smart contract was tricked into believing no funds had been withdrawn yet. This allowed the attacker to repeatedly create new GLP tokens using the same original funds.
Blockchain security firm PeckShield noted that the wallet used in the attack had been funded through Tornado Cash, likely to hide the trail. The stolen funds are currently stored in that wallet, while investigators attempt to track the transactions.
In response, GMX stopped all V1 trading on both Arbitrum and Avalanche, and also disabled GLP minting and leverage trading.
Resupply, a decentralized finance (DeFi) platform, confirmed a breach in one of its markets, which resulted in the loss of around $9.6 million worth of crypto assets. How did the incident happen? Read the full story.
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