Good day everyone,
I hope you are all having a good day, welcome to CryptoGod-1's blog on all things sports. In this post I will be looking at the recent flash loan attack on Shibarium.
Coordinated Flash Loan Attack on Shibarium
On the 13th of September an attacker used a flash loan to borrow a whopping 4.6 million BONE, the governance token of SHIB's Layer 2 network Shibarium, and in doing so they managed to gain access to 10 out of the 12 validator signing keys. The coordinated flash loan attack exploited Shibarium's bridge to Ethereum and managed to extract around $2.3 million in ETH and SHIB. This resulted in an emergency developer response after the attacker had gained control of the two-thirds consensus required to finalize fraudulent checkpoints on the network’s consensus layer, Heimdall.
https://x.com/Shibtoken/status/1966845298774278444
Once the attacker had majority control they were able to drain 224.57 ETH and 92.6 billion SHIB tokens from the Shibarium bridge contract. This was worth roughly $2.4 million at the time, while a further $700,000 in KNINE tokens tied to K9 Finance were also impacted. The good news is that K9 Finance’s DAO moved swiftly to blacklist the attacker’s address, rendering the KNINE tokens unsellable. Once the hack was noticed the Shibarium developers halted staking and unstaking across the network. According to Shiba Inu developers, the attack affected LEASH, ROAR, TREAT, BAD, and SHIFU coins.
Due to the fact the attacker borrowed BONE tokens, the lock on unstaking means the developers were able to freeze the position before full exit. The attackers tokens are locked and removed the validator control power for the time being. Law enforcement have been contacted and security firms Hexens, Seal 911, and PeckShield are now involved in the investigation. Developers have also extended a peace offering to the attacker. One of the Shiba Inu developers, Kaal Dhairya, noted on X:
“Authorities have been contacted. However, we are open to negotiating in good faith with the attacker: if the funds are returned, we will not press any charges and are willing to consider a small bounty.”
Community researcher Zilayo gave a technical breakdown of the incident, pointing to suspicious validator behaviour tied to Ryoshi Labs. A fraudulent checkpoint was signed by 10 validators who controlled around 40% of the stake. Once the flash-loaned BONE was delegated by the attacker to Ryoshi’s validator, the weighted stake surpassed 66% and ensured a full consensus takeover.
Once this happened the price of BONE spiked and briefly rose from $0.165 to $0.294 before settling back around $0.202. SHIB went up by more than 8% in the immediate 24 hours after the attack. The price of both tokens has since fallen, and SHIB sits at $0.00001362 at the time of writing.
https://www.coingecko.com/en/coins/shiba-inu
Have a great day.
Peace. CryptoGod-1.
