Security Firm BlockSec Stops NFT Lending Paraspace from Stolen 2,900 ETH

Stop attacks on Paraspace

BlockSec, a security company, announced on the 17th that it had blocked an unauthorized outflow by hacking into NFT (non-fungible token) lending “Paraspace”. The front run prevented 2,900 ETH (659 million yen) from going to malicious actors.

1/ There is a flawed logic in borrow() of the ParaProxy contract (0x638a) of @ParaSpace_NFT The attacker can borrow more tokens as his scaledBalance will be enlarged by depositing into the position of the proxy (0xC5c9), ie, specifying the _recipient of depositApeCoin(). https://t.co/Z4e1QOpLg3 pic.twitter.com/fkd96nAPHb

—BlockSec (@BlockSecTeam) March 17, 2023

Paraspace offers “cross-margin lending” collateralized by multiple NFTs. It launched in December 2022 and has about 18 billion yen ($139 million) in total assets (TVL) locked up in Ethereum at the time of writing.

BlockSec said there was a vulnerability in Paraspace’s lending agreement that allowed it to borrow cryptocurrencies with less collateral than usual. It is said that the attacker was able to manipulate the balance of the loan collateral at will.

The company intervened as a white hat at the timing when transactions were delayed due to low gas prices while monitoring the crime pattern of malicious hackers. By copying a malicious hacker’s contract, BlockSec took Paraspace’s assets earlier than the hacker.

BlockSec then contacted Paraspace to return the previously stolen assets to protect them from hackers.

Paraspace’s official Twitter account announced that they are investigating the issue and will suspend the service. It adds that the NFTs deposited on the platform are safe.

BlockSec co-founder and CTO Lei Wu says his product, which detects hacking attacks in real time, helped save Paraspace. It means that the program is activated to detect attack transactions and prevent them automatically.

BlockSec’s product is a kind of arbitrage bot. It’s designed to detect hacking and automatically activate Front Run. “Flashbots” allow transactions to be submitted directly to miners without going through the blockchain mempool (pending transaction list).

connection:Virtual currency wallet BitKeep hack, total damage exceeds 1 billion yen

BlockSec activity

After that, the person who attacked Paraspace claimed the right to devised this attack method in a message written on the blockchain, and demanded to pay even the gas fee of about 0.7 ETH.

.@DefinixOfficial has suffered an indirect price manipulation attack with ~17k USD loss.
Due to the low liquidity on Definix, the exploiter first makes swaps to unbalance the price. Then invoke RebalancePool.rebalance() to enforce bringing the price back. https://t.co/CKbooF7ocb… https://t.co/ 8kYKZvbZhI

—BlockSec (@BlockSecTeam) March 17, 2023

BlockSec products patrol the DeFi ecosystem daily. On the 17th, we detected a price manipulation attack on Definix. announced a loss of $17,000. Definix attackers first swapped illiquid assets repeatedly, causing arbitrary price fluctuations and arbitrage trading.

In April 2022, BlockSec prevented about 500 million yen ($3.8 million) from going to Saddle Finance attackers. In February, it stopped Platypus Finance hackers from stealing about 310 million yen ($2.4 million).

connection:Hacking attack on Hedera targets decentralized exchange liquidity pool

The post Security Firm BlockSec Stops NFT Lending Paraspace from Stolen 2,900 ETH appeared first on Our Bitcoin News.