dYdX Suffers from Frontend Exploit Amid Talks of Software Sale

Bloomberg claims that dYdX Trading, the company behind the decentralized financial platform, dYdX, is in talks to sell some of its tools. Among the companies vying for the dYdX v3 software are Wintermute and Selini Capital. With its better liquidity and less slippage, distributed derivatives trading—provided by the DEX—offers Per DeFiLlama, it currently has $452.2 million in total value locked.

It is important to note that the DEX rose to popularity in 2021 when the previous bull cycle was at its peak. Since then, the platform’s popularity has declined gradually but it still remains as one of the largest DEXs in the crypto space.

dYdX v3 Hacked

Not long after word of the possible software sale, the DEX declared that its v3 website had been hacked. Users on social media should not visit the website or follow any links until further notice, the company advised. 

“We just learned that dYdX v3 website (dYdX . exchange) has been compromised,” dYdX said in a post on X. “Please do not visit the website or click any links until further notice. An update will be provided when available. This message does not relate to dYdX v4.”

Phishing Website Set up

The hack entails the website for dYdX v3, a trading platform with weekly derivatives trading volume of about $1.5 billion. The attack aimed not on the underlying smart contracts but on the web domain. A phishing website has been set up requesting users to authorize a transaction pilfering their most precious tokens.

Still unaffected is the bigger dYdX v4 platform, which last week witnessed $6 billion in trade volume. Wintermute has not weighed in on the matter, and calls to dYdX and Selini Capital have not yet gotten answers.

Funds are Safe

It is important to note that the funds are safe but ten minutes into the frontend compromise and the crypto sector had a fake revoke app which also aimed to trick investors into losing their money. 

“The attacker has taken over the v3 domain (dydx.exchange), and deployed a copy-cat website that when users connect their wallets to it, it asks them to approve via PERMIT2 transaction to steal their most valuable token,” said a member on the official Discord channel.

Such phishing scams are attacks are prevalent in the digital asset space. As reported earlier by TheCoinRise, blockchain security firm Chainalysis unveiled Operation Spincaster, an international project aiming at eradicating “approval phishing” frauds that have deceived victims of $2.7 billion in cryptocurrencies since May 2021.