Hackers steal $25 million worth of cryptocurrency from Uniswap and Lendf.me

Hackers have stolen more than $25 million in cryptocurrency from the Uniswap exchange and the Lendf.me lending platform.

The attacks took place over the weekend, on Saturday and Sunday, respectively. Although an investigation is currently underway, the two attacks are believed to be related, and most likely carried out by the same group or individual.

According to investigators, hackers appear to have chained together bugs and legitimate features from different blockchain technologies to orchestrate a sophisticated "reentrancy attack."

Reentrancy attacks allow hackers to withdraw funds repeatedly, in a loop, before the original transaction is approved or declined.

The similarities between Uniswap and Lendf.me is that both platforms were using:

• Lendf.me protocol -- a decentralized finance (DeFi) protocol developed by the dForce Foundation to support lending operations on the Ethereum platform.
• imBTC -- a token (coin) that runs on the Ethereum platform and is valued at a 1:1 rate with the Bitcoin cryptocurrency.
• ERC-777 -- one of the underlying technologies of the Ethereum blockchain meant to support smart contracts (both Lendf.me and imBTC run as smart contracts on the Ethereum platform).

"The ERC-777 token standard has - to our knowledge - no security vulnerabilities," said Tokenlon, the company behind imBTC.

"However, the combination of using ERC777 tokens and Uniswap/Lendf.Me contracts enables [...] reentrancy attacks," the company wrote in a post-mortem report of the Uniswap and Lendf.me attacks.

The company believes the hackers used an exploit published in July 2019 on GitHub by OpenZeppelin, a company that performs security audits for cryptocurrency platforms.

At the time of writing, Uniswap is believed to have lost between $300,000 and $1.1 million in funds, while Lendf.me lost more than $24.5 million.

The hackers used the reentrancy attack to siphon funds from each platform into their wallet, and then immediately transfer the funds to other accounts.

Both websites have been taken down to prevent further attacks. Tokenlon has also suspended its imBTC token and is blocking all new transactions to prevent the hackers from carrying out new attacks against other platforms.