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The SOL token shed 9.5% on Friday to trade at $12.82, according to CoinMarketCap after Solana-based decentralized exchange Raydium was compromised for $2.2 million. In an afternoon tweet on Dec. 16, the Raydium log wrote that the hacker overrode the authority of the owners in the liquidity pools.
“An exploit on Raydium that impacted liquidity pools is being investigated,” the tweet reads. The post, which included the hacker’s account details, added that “the initial understanding is that the attacker has taken ownership authority, but authority for AMM and farm programs has been stopped for now.”
The exploit was discovered around 2pm UTC on December 16th when the Raydium administrator published 1,000 transactions on the Solana network – each transaction moving liquidity without escrowing a corresponding LP token. The vulnerability allowed the bad actor to access the LP’s funds – draining USDC, Wrapped SOL, and native Raydium token RAY.
According to data from analytics firm Nansen, “The LP pools, which drain the wallet from Raydium liquidity pools, have now received over $2.2 million, including $1.6 million SOL,” the company shared the information on its official Twitter account with.
Major platforms on Raydium including Prism and Compendium are withdrawing funds
In response to the security breach, big-name platforms built on Raydium have withdrawn their assets — even as the online crypto community has accused DEX of not having multisig cold storage.
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The Compendium Foundation announced that it had temporarily withdrawn $CMFI, $USDC and $SOL liquidity from Raydium following the incident. According to the firm, “the attacker gained access to keys used (to collect) fees from LP pools and authority has since been stopped.”
PRISM — a DEX aggregator that aggregates liquidity sources across Raydium and Solana — has also delisted its fund. The platform drained PRISM/USDC liquidity from Raydium and urged users to do the same. According to Prism’s account of the events, the malicious wallet “drained LP pools from Raydium liquidity pools using the admin wallet as a signer without burning LP tokens.”
Raydium is a decentralized exchange on Solana that allows users to trade different cryptocurrencies without intermediaries. According to data from DeFi aggregator DefiLlama, Raydium’s total locked value (TVL) is $36 million — down 98% from a peak of $2.21 billion in November before FTX’s fall.
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