On November 23rd, the KyberSwap founding team announced that KyberSwap Elastic had experienced a “security incident” and recommended users to withdraw all their funds to guard against potential vulnerabilities.
Specifically, the liquidity pools of KyberSwap’s DEX were compromised, with an estimated value of $47 million taken across multiple blockchains supported by the liquidity pool protocol, including Ethereum, Arbitrum, Optimism, Base, Polygon, and others.
Notably, a significant portion of the stolen funds consisted of locked liquidity tokens and liquid staking tokens of ETH. This included $20 million worth of wETH, $7 million worth of wstETH, $4 million worth of ARB, and various other tokens.
However, it appears that the hacker forgot about one pool on Scroll, which still holds $5 million in untouched assets.
Currently, KyberSwap is working diligently to address the security incident. Nevertheless, Kyber’s DeFi products have suffered a 68% decline within hours, with nearly $78 million leaving the protocol due to the hack and user withdrawals. KyberSwap’s TVL (Total Value Locked) is currently at $27 million, down from its peak of $134 million in 2023.
The price of the Kyber Network Crystal (KNC) token initially dropped 7% on news of the hack but later recovered and is trading at $0.74.
Notably, the hacker didn’t just withdraw the funds but also left a message describing their actions. Furthermore, they sent a message to the Kyber team, expressing their willingness to negotiate the return of the funds but stating they would have to wait “until fully rested.”