While the crypto market has advanced to new innovation and development, it continues to marred with phishing and hacking attacks. Recently, Spartan Protocol – a community-driven platform incentivizing deep liquid pools – reported a fresh attack from online hackers.

As per the information provided by Spartan, the hackers exploited an economic route to siphon $30 million worth of funds from the Spartan pool. To overcome this act, the attackers have reportedly used $61 million worth of Binance Coins (BNB), the native cryptocurrency of the Binance Smart Chain (BSC).

What we know so far –
*Attacker used $61m in BNB to overcome the pools via a as yet unknown economic exploit path to remove roughly $30m in funds from the pools.

Reach out if you can help identify and analyse the exploit.https://t.co/aNTvdzKOeF

CC @RektHQ @samczsun @bneiluj

— Spartan Protocol (@SpartanProtocol) May 2, 2021

Sadly, crypto scams continue to rock the fastly evolving crypto space. Spartan, however, has said that it has been working with the Binance team to bring a solution to this matter and recover the stolen funds.

Flash Loan Attack On Binance Smart Chain

The blockchain security and data analytics firm PackShield did some root cause analysis on the matter. The firm noted that the “incident was due to a flawed liquidity share calculation in the protocol”. This allowed the hackers to exploit the protocol and drain assets from its pools. In a brief summary, the blockchain security firm explained:

“This incident was due to a flawed logic in calculating the liquidity share when the pool token is burned to withdraw the underlying assets. In particular, the specific hack inflates the asset balance of the pool before burning the same amount of pool tokens to claim an unnecessarily large amount of underlying assets. The consequence of this attack results in more than $30M loss from the affected pool.”

As china’s popular crypto analyst Wu Blockchain explains, this is the first-of-its-kind flash loan attack on the Binance Smart Chain. Back in September 2020, the BSC imitating Syntetix Project was hacked as it landed on the Binance Exchange.

After attaining an all-time high of $641 earlier today, the BNB price has dropped 1.1% as of writing this story. At press time, BNB was trading at a price of $616 with a market cap of $95 billion.

About Author

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.