Cross-chain infrastructure protocol Socket.Tech suffered an exploit on Jan. 16, affecting various Web3 apps.
The attack targeted the Bungee Exchange, a frontend to the Socket Protocol which bridges between Ethereum and 12 EVM chains, resulting in a loss of about $3.3 million.
A hacker exploited a vulnerability in the SocketGateway part of the system, which allowed them to take money from users who had given permission to that component, without the users’ knowledge or consent.
Blockchain security firm PeckShield first reported the theft at 2:26 pm ET, which was then confirmed by Socket Tech about 30 minutes later.
Read more: ‘Wallet drainer’ code added to Ledger library has crypto on edge
Only a subset of users who interacted with a vulnerable bridging route added to the protocol in recent days and granted the gateway access to an unlimited amount of tokens were affected — about 700 victims based on a dashboard created on Dune Analytics.
The worst hit wallet saw $656,000 USDC drained to the attacker’s wallet, which then swapped all stablecoins into ether, an asset that cannot be frozen.
The attacker, whose wallet was funded from privacy-preserving exchange FixedFloat, essentially found a weak spot in how the system checked and processed user data, using this to illicitly access and transfer funds.
The route was subsequently disabled to prevent further exploitation, and service to the protocol was restored after about 6 hours.
In addition to Bungee, Socket’s bridging protocol is employed by third-party dapps such as wallets from Rainbow and Zeal, however both these prevented downstream effects by only invoking approvals for specific asset values in a transfer — which is considered best practice.
Rainbow wallet recommended users revoke permissions using the Revoke Cash tool, out of an abundance of caution.
The Socket team has promised a full post-mortem analysis, and said its other “top priorities” are “doing right by our users” and “recovery of funds.”
“We are deeply sorry for the turbulence caused,” they said.
Don’t miss the next big story – join our free daily newsletter.