Li.Fi Hack Drains Over $10 Million in Cryptocurrencies

Li.Fi, a popular cross-chain DeFi protocol, has been hit by a security exploit resulting in the loss of over $10 million in cryptocurrencies. This incident highlights the ongoing challenges faced by DeFi platforms in securing user funds.

What Happened?

On July 16th, a vulnerability in Li.Fi’s bridge was exploited, allowing hackers to steal crypto assets. Initial estimates placed the stolen amount at $8 million, but Li.Fi later confirmed losses exceeding $11 million.

The attack primarily targeted users who had granted “infinite approval” permissions to the Li.Fi protocol. This setting essentially gives unlimited access to user funds, creating a significant security risk.

Impact and Response

Li.Fi quickly disabled the affected smart contract and claimed to have contained the exploit. The team urged users to revoke approvals for specific addresses linked to the hack. Tools like Revoke.cash can be used for this purpose. This incident is a setback for Li.Fi, following a similar exploit in 2022 that resulted in $600,000 in losses.

Lessons Learned

The Li.Fi hack emphasizes the critical importance of user vigilance in DeFi. Avoiding “infinite approval” settings and regularly reviewing permissions are crucial steps to protecting your assets. DeFi platforms must prioritize robust security measures to build user trust and confidence in the ecosystem.

Additional Information

The stolen funds appear to be primarily stablecoins like USDC and USDT. Blockchain security firms like Cyvers and Decurity played a role in identifying and reporting the exploit. This incident is part of a larger trend of security breaches impacting DeFi platforms.

What This Means for You

If you use Li.Fi, check your account settings and revoke any unnecessary approvals. Be cautious about granting “infinite approval” permissions to any smart contract. Stay informed about security developments within the DeFi space.

ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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