DeFi Protocol Convergence Targeted in Major Hacking Attack

• Leveraging decentralized governance hedge fund platform Convergence.
• 58M CVG tokens were minted and exchanged.
• Following the hack, the value of the CVG token plummeted 99% from $0.12 to $0.0004.

On Thursday, decentralized finance (DeFi) protocol Convergence fell victim to a significant vulnerability, resulting in a severe impact on its CVG token.

Hackers Exploit Vulnerability in Convergence Code Library

According to web3 security company QuillAudits, the breach was orchestrated by exploiting weaknesses in the protocol’s code base. The attacker took advantage of this vulnerability to mint a large number of CVG tokens, which were then exchanged for wETH and crvFRAX through Curve’s liquidity pool. Following the token swap, the funds were converted to ether (ETH) and transferred to Tornado Cash to conceal the transaction.

The attack led to an estimated loss of $210,000, with the value of CVG tokens plunging dramatically. Before the incident, CVG held a fully diluted value of $17 million. However, the token’s price plummeted by 99% on the Curve liquidity pool, dropping from $0.12 to $0.0004.

Convergence Issues Warning, Advises Users to Halt Activity

In response to the security breach, Convergence issued a cautionary statement urging users to refrain from interacting with the protocol to mitigate further risks.

The protocol’s development team and security experts are actively investigating the vulnerability to prevent future breaches and minimize the impact of the attack.

This incident underscores the persisting risks associated with DeFi protocols and underscores the critical importance of robust security measures to safeguard digital assets.