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Deus Finance Suffers SECOND Hack in 60 Days Losing a Further $13 Million

Quick take:

  • Deus Finance fell victim to the latest flash loan attack costing them around $13.4 million.
  • A similar exploit attacked the project in March, where they lost $3 million.

Deus Finance DAO is the most recent DeFi protocol to be hacked.

Early Thursday morning a flash loan attack was aimed at the multi-chain DeFi project, which operates on Ethereum, Fantom, BNB Chain, and several other Layer 1 networks.

One hack after the other

According to on-chain data, an attacker utilized a flash loan to target a DEUS liquidity pool on Fantom.

Aave, an early Ethereum DeFi project, pioneered flash loans, which allow DeFi users to borrow an endless amount of money without putting up any collateral as long as they return the loan in the same transaction.

While flash loans are an example of DeFi innovation, they have caused controversy due to their role in several multi-million dollar data breaches.

This assault follows a pattern that has been seen before in other instances. According to blockchain security firm PeckShield in a Twitter storm, the hacker used the loan to manipulate a pricing oracle in order to boost the price of Deus DEI stablecoin falsely.

They then used the DEI as collateral to borrow more money and complete a USDC transaction. They had around $13.4 million left over after paying off the flash loan.

Following the flash loan attack, the hacker moved the funds from Fantom to Ethereum and siphoned them to a "clean" address using Tornado Cash. This Ethereum-based privacy-preserving tool is commonly used in DeFi attacks.

Deus provided an update recently, indicating that client funds are safe and that DEI funding has been temporarily paused. It also stated that further information would be provided later. It will have to explain itself after becoming the victim of a $3 million flash loan fraud less than a month ago.

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