Velocore Loses $10M in Hack: Will This Trigger a New Wave of DEX Regulation?

June 2, 2024 at 01:34 PM GST 2 mins read Crypto Live News

Velocore’s hack resulted in a $10 million loss, prompting a comprehensive investigation and freezing of stolen funds.
A portion of the stolen Ether was moved from zkSync and Linea to Ethereum mainnet, complicating recovery efforts.
Velocore’s response highlights the need for robust security protocols and rapid responses in decentralized exchanges.

Velocore, a decentralized exchange that runs on the zkSync and Linea platforms, experienced a significant security breach. The estimated loss of customer funds as a result of the hack is close to $10 million.

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Velocore has responded quickly by launching a thorough investigation and establishing an “on-chain negotiation process” to handle the aftermath of the incident. This comes in the wake of recent hacks in the crypto community.

Breaking: DEX Velocore on zkSync and Linea is suspected to be hacked, and all users' LPs were stolen, involving $10 million. Linea once stopped producing blocks but has now resumed. Hackers have transferred part of the ETH across chains to the Ethereum mainnet.
H/T @officer_cia…
— Wu Blockchain (@WuBlockchain) June 2, 2024

In order to safeguard its remaining assets, Velocore suspended operations and sent out an “Emergency Notice” cautioning users not to use the platform any longer. Velocore took quick preventative action after verifying the hack, such as freezing the stolen money.

The purpose of this action was to reduce further damage to their finances. However, the attacker was able to move some of the stolen Ether tokens from Linea and zkSync to the Ethereum mainnet, making recovery more difficult.

Velocore is working with a professional security team to better understand the particulars of the attack. While functionalities are temporarily frozen, operations on the Telos mainnet are unaffected, and Velocore continues to work closely with the Telos foundation.

This incident brings to light the ongoing safety risks in decentralized platforms. Velocore’s quick action and continuing investigation highlight the importance of strong security protocols and quick response mechanisms in the cryptocurrency ecosystem.

The Velocore hack emphasizes how crucial solid safety measures are for decentralized exchanges. The cryptocurrency community will be closely monitoring Velocore’s efforts to handle the crisis and win back the confidence of its customers. Decentralized finance platforms’ stability will be largely dependent on guaranteeing user safety and preventing such incidents in the future.