• CertiK recently released a report which revealed that an Arbitrum-based DeFi project, Hope Finance, lost $2 million to scammers.
• The culprits had secretly removed this amount from the project’s users’ funds.
• The decentralized finance sector witnessed about 155 theft incidents and lost over $3.1 billion in 2022.

Hope Finance Robbed of $2 Million

CertiK, a web3 security company, reported that a decentralized finance (DeFi) project based on Arbitrum, Hope Finance, was robbed of $2 million by scammers. The culprits were able to clandestinely remove the money from the platform’s users’ funds.

Vulnerability in Smart Contract

A member of CertiK stated that the scammer modified smart contract details to hastily extract funds from the genesis protocol of Hope Finance. On February 13th, Cognitos did an audit and discovered two vulnerabilities in its central contracts: reentrancy attack possibility and incorrect modifier; however, it still concluded that the code was secure enough.

Increase in Theft Incidents

It has been noted that there has been an increase in fraud cases compared to 2021 with total losses amounting up to $3.1 billion in 2022 alone. This is a 56.2% rise when compared to last year’s figure at $2036015 896 worth of losses resulting from 155 different theft incidents across the crypto ecosystem.

Emergency Withdrawal Function

In light of the situation, Hope Finance created an emergency withdrawal function for its users so they could take out their staked liquidity before any further damage occurred due to potential scams or other malicious activities on their platform.

Conclusion

The recent incident is one example out of many which shows why additional security measures must be taken within the cryptocurrency industry moving forward if it is going to become as safe as traditional finance systems are today or even more so than them in terms of protection against cybercrimes such as these ones mentioned here today.