Cream Finance Update: Hacker makes a Comeback in Cryptocurrency Attacks

According to reports, according to CertiK monitoring, the Cream Finance Flash Loan attacker 0x70747df6AC244979A2ae9CA1e1A82899d02bbea4 has replaced an additional 500000 DAIs with ETHs. Cream Finance was hacked in June last year and lost approximately $8.8 million.

Cream Finance Flash Loan Attackers have swapped another 500000 DAIs for ETH

Introduction

The world of Cryptocurrency experienced yet another setback as Cream Finance fell victim to a hacking attack in June 2020. The attack led to the loss of up to $8.8 million by the platform. Recently, development took a new turn as hacker 0x70747df6AC244979A2ae9CA1e1A82899d02bbea4 made a comeback by exchanging an additional 500,000 DAIs with ETHs, further jeopardizing the financial system.

What is Cream Finance?

Cream Finance is a Defi lending platform that operates on Ethereum. Being a Defi (Decentralized Finance) platform means that Cream Finance executes its operations on a blockchain network. This platform allows individuals to lend, borrow and invest in token pairs.

The Challenge

Defi lending platforms have been a prime target for cybercriminals. Recent attacks have heightened concerns and amplified the need for more robust security measures. Due to the decentralized nature of the blockchain network, the lack of a central authority makes it difficult to trace and recover hacked funds in such attacks.

What Happened?

According to reports, CertiK monitoring indicated that the Cream Finance Flash Loan attacker 0x70747df6AC244979A2ae9CA1e1A82899d02bbea4 was responsible for replacing an additional 500,000 DAIs with ETHs. This occurrence has caused panic and alarm within the cryptocurrency community, as it indicates the possibility of a reoccurrence of the devastating attack from last year.

Cream Finance Flash Loan Attack

The Cream Finance Flash Loan attacker exploited the Defi protocol by leveraging the Flash Loan feature. A flash loan is an uncollateralized borrowing mechanism that enables a user to borrow a vast amount of money without having to provide any form of collateral, provided it is returned within the same transaction. The Flash Loan feature has proven useful, but it is at risk of exploitation by hackers.

The Aftermath of the Attack

The Cream Finance attack had several ramifications. First, the attack led to a loss of trust and credibility, causing the platform’s users to lose money, as well as causing damage to the platform’s reputation. Second, the attack exposed the underlying security flaws in Defi protocols, highlighting the vulnerability of Defi systems to cyber attackers.

How to Stay Safe

There are several precautions and security measures that users of Defi platforms can take to minimize the risk of hacking attacks. First, ensure to use a Defi platform that uses a trusted auditor to regularly inspect its code for vulnerabilities. Second, use only secure wallets like hardware and paper wallets to protect your funds. Third, avoid sharing your private keys with anyone or using the same password for all your accounts, and lastly, keep yourself informed about the trends and patterns within the cryptocurrency ecosystem.

Conclusion

The Cream Finance attack highlights the need for heightened security measures within Defi protocols. While the current guidelines and regulations are not enough to prevent attacks, users of Defi systems can take proactive measures to stay safe. The recent cyber-attacks on Cream Finance and other Defi protocols illustrate the growing concern for blockchain systems’ vulnerabilities; hence there is a need for more robust cybersecurity measures.

FAQs

Q1. Can the stolen funds be recovered?

A1. Once funds are stolen from a blockchain network, it is challenging to trace or recover them. This is due to the decentralized nature of blockchain networks that operates without a central authority.

Q2. Can users of Defi protocols get insured against digital asset loss?

A2. Yes, some insurance companies provide coverage for cryptocurrency losses. However, the insurance policies may not cover all types of losses.

Q3. What is the future of Defi protocols?

A3. The adoption of Defi protocols has been on the increase in recent times, making Defi protocol one of the fastest-growing blockchain-based systems. There is a need for stakeholders in the cryptocurrency ecosystem to come together to develop more robust security measures that mitigate risks and enhance Defi adoption.