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At least two DeFi projects were targeted by significant exploits in the early hours of today, resulting in millions of dollars in losses.

Sonne Finance exploitedDecentralized liquidity provider Sonne Finance fell victim to a $20 million exploit on its Optimism network-based USDC and Wrapped Ethereum (WETH) contracts, according to blockchain security firm Cyvers.

In a May 15 statement, the DeFi protocol confirmed the incident and attributed the exploit to a donation attack on its Compound v2 forks. It stated:

“We avoided the issue in the past, by adding the markets with 0% collateral factors, adding collateral and burn them, only then increase the c-factors according to the proposals.”

However, an integration attempt of VELO into the Optimism market allowed the attacker to exploit the protocol unnoticed, resulting in the loss.

Meanwhile, security experts prevented an additional $6.5 million theft by injecting $100 VELO as collateral into the soVELO pool.

Sonne Finance has expressed readiness to offer a bounty to the attacker as efforts to recover the funds continue.

Following the theft, the price of SONNE, a digital asset connected to the project, fell by more than 60% to $0.02617 as of press time.

Bitcoin DeFi project lose over $4 millionALEX Lab, a Bitcoin DeFi application, lost over $4 million in various tokens to a hacking incident earlier today.

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Blockchain security firm CertiK reported that the attackers likely gained access to the private key controlling ALEX's XLink bridge. This service enables users to transfer tokens across different blockchains.

The hacker successfully moved approximately $300,000 worth of BTC, $3.3 million in stablecoins, and $75,000 of Sugar Kingdom tokens.

ALEX Lab developers confirmed the hack and asserted that they had identified the attacker. The team also stated:

“A significant amount of the funds associated with the hacker has been frozen by major exchanges, preventing further misuse.”

Nevertheless, the project offered a 10% bounty to the hacker, adding that:

“ALEX assures that upon compliance, there will be no further pursuit or law enforcement involvement. This offer stands until 18 May at 0800 UTC. The individual responsible should contact [email protected].”

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In a series of alarming incidents, two prominent decentralized finance (DeFi) platforms, Sonne Finance, and ALEX Lab, have been targeted by sophisticated hacks, resulting in a combined loss of $24.3 million in cryptocurrencies.

Sonne Finance halted operations after a $20 million exploit, while ALEX Lab lost $4.3 million due to a suspected private key compromise. Both platforms are now in a race to recover their stolen assets and prevent future breaches.

Sonne Finance: $20 million heist Lending protocol Sonne Finance was forced to pause operations after suffering a hack that drained $20 million worth of cryptocurrencies from the market. 

The attack, which targeted Sonne Finance’s USD Coin (USDC) and Wrapped Ether (WETH) contracts, was detected on May 14 by Web3 security firm Cyvers.

Sonne Finance announced the suspension of all markets on the Optimism (OP) blockchain to mitigate further damage. Partnering with Cyvers, the protocol is actively investigating the breach and exploring options to recover the stolen funds, including negotiating a bug bounty with the hacker. ‘

However, blockchain investigator PeckShield reported that the hacker has already moved a substantial portion of the loot ($7.8 million) to a new wallet address.

The hacker then swapped 59 Wrapped BTC (WBTC) for roughly 1,185 Ether (ETH) and 183,000 Dai (DAI), indicating an intent to use a privacy protocol like Tornado Cash to obscure the transaction trail.

Details of the exploit According to the incident analysis by Certik ,the attack exploited a known bug in Sonne’s Compound v2 forks via a donation attack, manipulating the platform’s exchange rates by donating large amounts of cryptocurrency. 

This manipulation tricked the system into overestimating its collateral, allowing the hacker to siphon off millions. Blockexplorer data showed the attacker transferred millions of VELO, ETH , USDC following the manipulation, later converting these to $8 million in Bitcoin and Ether.

The SONNE token has since plummeted by 60%, drastically reducing its market cap to $20 million, even though developers managed to prevent an additional $6.5 million from being siphoned off once the attack was identified.

ALEX Lab: $4.3 million compromise Simultaneously, ALEX Lab, a Bitcoin DeFi tool, was drained of over $4.3 million in various tokens due to a suspected private key compromise. Security researchers from CertiK revealed that the attackers likely obtained a private key controlling ALEX’s XLink bridge, a service facilitating token transfers between different blockchains.

#CertiKInsight 🚨

We have seen a suspicious transaction affecting @ALEXLabBTC

Initial evidence points to a possible private key compromise.

Deployer of 0xb3955302E58FFFdf2da247E999Cd9755f652b13b upgrades to a suspicious implementation.

In total ~$4.3m worth of assets have… pic.twitter.com/02kiw2dFrm

— CertiK Alert (@CertiKAlert) May 14, 2024 The breach resulted in the loss of over $300,000 worth of Bitcoin, $3.3 million in stablecoins, and $75,000 in Sugar Kingdom (SKO) tokens.

ALEX developers confirmed the hack and claimed they knew the attacker’s identity, offering a 10% bounty for the return of 90% of the stolen funds. Major exchanges have since frozen funds associated with the hacker to prevent further misuse.

The recent hacks on Sonne Finance and ALEX Lab highlight the persistent security challenges facing DeFi platforms.

As these platforms work to recover stolen assets and enhance their security frameworks, the incidents serve as a stark reminder of the vulnerabilities inherent in the rapidly evolving DeFi landscape.

The developer of Bitcoin-focused defi platform ALEX Lab says North Korean hackers are likely behind the latest $4 million attack.

North Korean hacker group Lazarus Group is very likely responsible for the attack that left Bitcoin-focused defi platform ALEX Lab without $4 million worth of tokens earlier in May. In an X post on Jun. 25, ALEX Lab’s official account said there’s “substantial transaction evidence” showing that the attack is linked to the Lazarus Group.

https://twitter.com/ALEXLabBTC/status/1805415489717551402

In mid-May, ALEX Lab was drained of more than $4.3 million in multiple tokens following the attack on its bridging service. Shortly after the attack, ALEX Lab developers revealed in a now-deleted X post they “identified the individual responsible for the recent security breach.” At the same time, the team offered a 10% bounty for the return of 90% of the stolen funds. Later on, the post was quietly removed without further explanation.

The ALEX Lab team assures its customers that it is “actively collaborating with international law enforcement and cybersecurity experts to address the implications of this attack and to recover lost assets,” adding that “enhanced security protocols are being implemented.”

Launched in 2021 by former bankers Chiente Hsu and Rachel Yu, ALEX Lab was developed to simplify the use of decentralized finance (defi) services on Bitcoin via Stacks, a platform for smart contracts. According to data from CoinCarp, the startup raised a total of $18.3 million, though its valuation hasn’t been disclosed.

ALEX, the native token of Bitcoin layer-2 (L2) bridge ALEX Lab, emerges as the top gainer among the largest 500 crypto assets over the past 24 hours.

This remarkable uptrend comes on the back of the broader recovery campaign engineered by Bitcoin (BTC) and the altcoin market. Despite the sustained selloffs from the German government, BTC rebounded on July 9, coinciding with a similar increase in ALEX’s price.

ALEX price – July 11 | Source: CoinMarketCap However, while the flagship crypto asset witnessed a correction on July 10, ALEX maintained its bullish trajectory. The token spiked 21.72% yesterday, further building on the momentum to register a 57% increase this morning.

Remarkably, ALEX has increased 108% since Monday, leveraging the renewed market-wide strength to breach key resistance levels. Amid the bullish run, the asset has now breached the 50% Fibonacci retracement zone at $0.1379, flipping it into support. ALEX now eyes the Fib. 61.8% level at $0.1566.

ALEX emerged as the top gainer among the leading 500 cryptocurrencies with a 70% rally in the past 24 hours. the asset is trading at $0.14 at the time of writing. Its daily trading volume spiked 1,245%, reaching $49.91 million, indicating increased interest among market participants.

This bullish momentum comes two months after ALEX Lab suffered a $4.3 million hack, an attack it attributed to the Lazarus Group. The ALEX token tumbled 28% following the incident. While the event impacted investor sentiment, confidence in the protocol has since returned, recently evidenced by the latest demand around its native token.

Launched in 2021, ALEX Lab is a layer-2 Bitcoin defi protocol running on Stacks smart contracts. The protocol provides a launchpad, a decentralized exchange (DEX) and a lending and borrowing market.

PANews reported on May 18th that the ALEX Lab Foundation submitted governance proposal AGP-8, proposing structural adjustments to the ALEX protocol, including ceasing ALEX community token issuance, closing the Treasury Grants Program (TGP), and introducing a protocol-driven token buyback and burn mechanism. Currently, the circulating supply of ALEX is approximately 973 million, close to the 1 billion limit. If the proposal passes, the next 32 cycles will be the final ALEX issuance cycle, after which no new tokens will be issued. Approximately 1.568 million STX tokens remain unclaimed in the TGP 2024 treasury. After a 30-day grace period, the ALEX Lab Foundation will use these funds to buy back and burn ALEX tokens at market prices. Future protocol revenue, after covering operating costs, will also be used for continued buybacks and burns. This proposal marks ALEX's shift from an inflationary to a deflationary model. Voting will take place from 10:00 AM on May 17th to 10:00 AM on May 31st (UTC+8).