DeFi protocol integration hit by major hack, CVG token crashes
Decentralized hedge fund platform Convergence has been exploited. 58M CVG tokens were exchanged. CVG token price dropped 99% from $0.12 to $0.0004 after the hack.
On Thursday, the decentralized finance (DeFi) protocol Convergence suffered a serious breach, causing the CVG token to crash dramatically.
The exploit involved the creation of 58 million CVG tokens, which were then exchanged for $200,000 worth of packaged Ether (wETH) and the crvFRAX stablecoin.
The hacker exploited a vulnerability in Convergence's codebase
This malicious activity was carried out by exploiting a vulnerability in the protocol's code base, according to Web3 security firm QuilAdits.
The attacker took advantage of this flaw to create a large number of CVG tokens and convert them into WETH and crvFRAX in Curve's liquidity pools. Following the token exchange, the attacker converted the money into Ether (ETH) and forwarded it to Tornado Cash, a privacy tool designed to obfuscate transaction paths.
This breach resulted in an estimated $210,000 in financial losses, and CVG token holders experienced a catastrophic drop in token value.
Before the attack, CVG had a completely stagnant valuation of $17 million. However, the token's value has plummeted by 99% in Curve's liquidity pools, dropping from $0.12 to a fraction of a percent, trading at $0.0004.
Frens, @Convergence_fi was hit by an exploit resulting in a loss of around $210,000. 🚨
The attacker withdrew $58 million in CVG tokens and exchanged them for 60 WETH and 15.9k crvFRAX.
The price of $CVG at the time of exploitation was $0.1155. It dropped 99% and is currently at $0.000413… pic.twitter.com/43MJGjQg2i
— QuillAudits ➡️ Web3 Security 🥷🛡️ (@quillaudits_ai) August 1, 2024
Convergence requires users to pause activities on the platform
In response to the incident, Convergence advised users to avoid interacting with the protocol to avoid further risk.
🚨 Urgent contact 🚨
Convergence is hacked. Please do not interact with the protocol.
— Convergence (@Convergence_fi) August 1, 2024
The protocol team and security experts are currently investigating the breach to prevent future vulnerabilities and minimize the damage caused by the exploit.
This incident highlights the ongoing risks associated with DeFi protocols and the need for strong security measures to protect digital assets.
