DeFi Protocol Convergence Suffers Hacker Attack, Cryptocurrency CVG Plummets
The decentralized finance (DeFi) protocol Convergence, which is based on Curve and focused on yield enhancement, was hit by a hacker attack on Thursday (1st), causing its cryptocurrency CVG to plummet to nearly zero.
The attacker minted 58 million new CVG tokens after discovering and exploiting a vulnerability in the protocol’s codebase. Subsequently, the attacker swapped all assets for 60 Wrapped Ether (wETH) and 15,900 crvFRAX stablecoin tokens using liquidity pools on Curve, as reported by the auditing company Web3 QuillAudits.
Data from Etherscan shows that the attacker later converted the funds into ether (ETH) and sent the tokens to the controversial cryptocurrency mixer Tornado Cash.
The attack resulted in a loss of around $210,000 for the protocol, according to QuillAudits. However, CVG holders bore the brunt of the impact, as the fully diluted value (FDV) of the token evaporated from $17 million to practically zero.
As a result, the price of CVG plummeted by 99% in Curve’s liquidity pools, dropping to $0.0004. Convergence urged users not to interact with the protocol for security reasons.
The incident serves as a stark reminder of the risks associated with DeFi platforms and the importance of robust security measures in the rapidly evolving crypto space. Stay tuned for further updates on this developing story.
