Attackers Looted $1.4 Million In wETH From OMNI Protocol

OMNI, a cryptocurrency lender platform that collects staked NFTs as collateral, recently lost about $1.4 million in ETH. The exploitation was carried out via a fake re-entrancy scheme.

How The Attack Took Place

According to the report, the perpetrator used NFTs from the Doodles collection to launch the attack. They deposited the Doodles NFTs on the platform and the firm lent out wrapped Ethereum (wETH) to them. 

After securing the loan, the attacker withdrew their NFTs leaving one behind. This caused a callback function that erased the attacker’s debt history of wETH from the platform’s database. 

When the remaining Doodle NFT was insufficient to pay the attacker’s debt, the system automatically closed the position and returned the last NFT to the attacker. 

This way, the attacker looted the $1.4M in wETH, recovered deposited NFTs, and also closed his debt position. This attacker was reported to be an expert that is not new to the craft.

The Perpetrators Do Not Plan To Return The Loots

Recently, the decentralized finance industry, DeFi, has suffered several attacks resulting in the loss of significant funds. Sometimes, some networks get lucky when perpetrators honor their open appeals to return looted funds. 

In return, networks offer a white-hat as a replacement for returned-stolen funds. Examples of this scenario include that of the Optimism network where the perpetrator returned almost all the looted funds. 

However, not all networks succeed with this appeal as they get shunned by the attacker. Such was the case of Harmony network when it was looted recently.

As reported, OMNI never got the opportunity to even appeal as the stolen funds were immediately moved from the platform. The looted wETH was traced to the Tornado network which is highly reputed for endorsing anonymous transactions. 

This means the attacker’s address cannot be traced henceforth according to Tornado’s mode of operation.

OMNI Assured Users Of Secured Funds After Suspending Activity

Following the exploit, the team behind OMNI protocol has temporarily suspended its activities till all security weaknesses are fortified. They also assured their customers that their funds were not among the stolen ones. 

They hinted that the OMNI protocol is still in its testing phase (beta). Hence, the looted funds were from the stored funds meant for internal testing supports and not customers’.

They said the investigation is still on and every detail of the attack would be reviewed by external security agencies. Until the case is solved, activities on the protocol would remain on hold. 

Consequently, the progress of the OMNI protocol would be stuck at the beta stage longer than proposed. This would negatively affect both the developers and the users who have been eagerly awaiting its completion.

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