Blockchain intelligence firm PeckShield has issued a security alert on their official account, stating that a hacker has targeted Arcadia Finance on Ethereum and Optimism, resulting in the theft of approximately $455,000 from the protocol.
PeckShield analysis reveals that the theft occurred due to an “untrusted input validation” vulnerability in the code of Arcadia Finance, allowing the hacker to gain unauthorized access to the darcWETH and darUSDC wallets of the DeFi protocol.
As per the latest reports from PeckShield, 179.03 ETH from Arcadia Finance has been stolen from the Optimism chain. This amount appears to have been laundered through the Tornado cash protocol, while the funds from the Ethereum chain remain in the hacker’s wallet.
Just two hours after the PeckShield warning, Arcadia Finance posted a tweet acknowledging the hack. The DeFi project’s management team announced that they have temporarily halted all ongoing contracts and initiated an investigation with the assistance of security experts.
According to data from DeFiLlama, the incident at Arcadia has resulted in a sharp 76% decrease in the total value locked (TVL) of the protocol, dropping from $604,440 to the current value of $142,824.