Balancer, a decentralized finance (DeFi) protocol built on the Ethereum network, has become the latest victim of a security breach that has swept approximately $129 million from its ecosystem.
Hours later, Laurence Day, a British national and cybercriminal, was pinpointed as the mastermind behind the attack. The British law authorities have commenced a pursuit for the infamous actor.
Balancer Hacked for $129M
The bad actor targeted liquidity pools on the Balancer version 2 (V2) to facilitate the exploit. The Balancer V2 features a smart contract-enabled protocol vault that holds assets within the ecosystem. The vault supports various features, including the internal token balance, which allows users to hold cryptocurrencies usable for future trades in the vault.
While conducting the attack, the bad actor could initiate internal balance withdrawals from Balancer’s smart contracts without appropriate authorization. This way, they siphoned 6,850 osETH, 6,590 wETH, and 4,260 wstETH from Balancer V2. The stolen funds nearly equaled $129 million. The hacker has moved these funds through decentralized crypto mixers, such as Tornado Cash, to obfuscate the traces.
A few hours into the hours-long exploit, Balancer disclosed on X that the attack affected only its V2 ecosystem. It added that V3 wasn’t impacted by the breach. It also explained that investigations are underway to recover the stolen funds and potentially apprehend the hacker.
This is the third time that Balancer has suffered a security breach. The first two attacks occurred in 2021 and 2023, each resulting in losses worth millions of dollars. This stresses the need for advanced security measures within the DeFi ecosystem.
Since the latest exploit, Balancer’s total value locked (TVL) on DefiLlama took a big hit. It dropped from $775.75 million before the attack to $308.14 million after the security breach.
The project’s native token, BAL, experienced a considerable decrease in valuation, selling for $0.825 at the time of writing. This represented a 17.7% decrease within the past week.
Laurence Day on the Run
With the British law authorities currently on a manhunt for Laurence Day, he is now on the run. The country’s authorities also discovered that he was behind the $100 million hack on Euler Finance’s v1.
Market experts discovered that the infamous hacker used a paid subscription to the popular AI chatbot ChatGPT to develop the code used to deploy the attack.
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