BadgerDAO users' cryptocurrency stolen in cyber attack

In a surprising move, BadgerDAO has publicly expressed a willingness to work with the threat actor who recently breached the decentralized finance platform and stole more than $100 million in users' funds.

Badger provided a timeline of events, which began last week, along with exploit status updates, including its work with U.S. and Canada law enforcement and security vendors Chainalysis and Mandiant to investigate the incident. Along with updates, Badger included a note to the threat actor complete with a contact email and urged the attacker to "do the right thing on behalf of the community."

"You have taken funds that do not belong to you but we are willing to work with you and compensate you for identifying the vulnerability in the systems. We are providing you with a direct line of communication to discuss a peaceful resolution without involving any outside parties," the statement said.

The most recent update Monday said the investigation is ongoing "to determine the full scope."

The investigation began after the platform received reports of unauthorized withdrawals. Subsequently, "all smart contracts were paused to prevent further withdrawals." As of Saturday, the application used for transactions had not been reactivated and users remained "unable to deposit, claim rewards, or withdraw from the Badger app."

However, BadgerDAO did provide some insight into the cause of the attack.

"A recent exploit led some BadgerDAO users to approve a malicious contract that resulted in the loss of the funds," the statement said.

Additionally, Badger said during the attack "users were prompted to set token permissions to the attacker's address which allowed them to remove funds."

Chainalysis told SearchSecurity this type of attack is not common and involved a unique exploit. Blockchain security firm PeckShield, which is investigating the attack and tracing the stolen funds, estimated the total loss at $120 million as of Thursday.

"Looks like good progress has been made. Fingers crossed!" PeckShield wrote on Twitter.

Badger recommended users take several steps to determine their level of impact, including checking Etherscan for unauthorized transactions and revoking token permissions, which helped enable the attack.

BadgerDAO did not respond to requests for comment.

The attack on BadgerDAO is one of several recent incidents affecting cryptocurrency platforms. Over the weekend, BitMart confirmed their network was breached, resulting in the theft of approximately $150 million in users' cryptocurrency from two hot wallets. Last month, BTC-Alpha suffered a ransomware attack, though the company said no user funds were affected.