GMX, an on-chain perpetual and spot exchange, experienced a substantial security breach.

The exploit, which resulted in the loss of approximately $40 million, has triggered a sharp decline in the value of the GMX token.

As far as hacks go, this incident further underscores the dangers and impact of persistent vulnerabilities within the decentralised finance space.

Prices have often dipped sharply amid such news.

GMX hacked for $40 million

On July 9, 2025, GMX announced that its V1 platform and GLP liquidity pool on the Arbitrum network were compromised, leading to the unauthorised transfer of around $40 million in tokens to an unknown wallet.

The GLP pool of GMX V1 on Arbitrum has experienced an exploit. Approximately $40M in tokens has been transferred from the GLP pool to an unknown wallet.

Security has always been a core priority for GMX, with the GMX smart contracts undergoing numerous audits from top security…

— GMX (@GMX_IO) July 9, 2025

The GMX team detailed in a post by X that, following the incident, trading, minting, and redeeming of GLP on both Arbitrum and Avalanche were disabled to mitigate further risks.

SlowMist also highlighted the exploit, noting on X:

“The root cause of this attack stems from GMX v1’s design flaw where short position operations immediately update the global short average prices (globalShortAveragePrices), which directly impacts the calculation of Assets Under Management (AUM), thereby allowing manipulation of GLP token pricing.”

By leveraging the Keeper’s ability to enable timelock.enableLeverage, the attacker created massive short positions, artificially inflating GLP prices, and subsequently profited through redemption operations.

The highlighted code snippet from the post illustrates the critical section where global short profit/loss calculations were exploited, enabling the manipulation.

GMX’s response included a commitment to investigate the incident with the assistance of security partners, promising a detailed update.

“Out of an abundance of caution, GMX had already updated the caps for the GM tokens of GMX V2 on Arbitrum and Avalanche, so that minting new tokens is currently restricted in most liquidity pools. A follow-up notification will be sent out once this restriction is lifted,” the platform wrote.

GMX price dives 20% amid market reaction

The reaction of GMX holders to the hack was largely negative, with the price falling sharply to see the DEX protocol lag the overall crypto bounce.

According to data from CoinMarketCap, the GMX token experienced a double-digit decline.

It traded above $14.54 but dropped more than 20% to lows of $10.40.

The breach of GMX adds to the list of key crypto protocol exploits in 2025, with Cetus Protocol among those to suffer a malicious attack a few months ago.

Unless GMX successfully recovers the funds or implements robust security enhancements, the negative sentiment could impact its price.

Currently, the GMX token trades near $11.45, still under pressure after falling from highs above $14.54.

The post GMX price dives 20% after $40 million hack appeared first on CoinJournal.

GMX price dives 20% after $40 million hack

Source: https://coinjournal.net/news/gmx-price-dives-20-after-40-million-hack/