Defi protocol Level Finance confirmed that its platform faced a security breach & lost $1 million worth of crypto assets.
Level Finance is a non-custodial crypto exchange for spot and perpetual contracts built on BNB Chain. This Defi platform was founded by an anonymous team and was launched in Dec 2022.
On 2 May 2023, the Level Finance team confirmed that the platform faced a security breach and a hacker succeeded to drain 214,000 of the exchange’s LVL tokens and further swapped into 3,345 Binance Coin (BNB).
The hacker targeted the platform’s Referral Controller Contract and in this attack LP’s and DAO treasury was unaffected.
Crypto security platform Peckshield reported that hackers tricked the LevelReferralControllerV2 contract to claim multiple referrals unethically.
The Level Finance team confirmed that it will deploy the new referral contract to fix the bug in the next 24 hours. For now, the referral program is suspended to prohibit any additional attack.
Because of this news, the LVL token, the native token of this Defi platform, is down by 16.5% over the last 24 hours’ trade price.
Defi & hack attacks
The popularity of the Defi crypto project surged in late 2020 and after that several Defi platforms appeared in the sector with different concepts.
The Defi sector completed around 3.5 years but still, Defi protocols are under big pressure citing vulnerabilities & bug issues.
In 2022, the majority of the hacking attacks in the crypto sector targeted Defi platforms.