BSC DeFi project Impossible Finance loses $500K in flash loan attack, 3 weeks after $7M fundraising
- Impossible Finance is the latest Binance Smart Chain project to suffer a flash loan attack, losing $500,000 just weeks after raising $7 million in a fundraising round.
- Data shows that over $160 million was lost to flash loan attacks in the BSC ecosystem, and it’s raising concerns across the industry.
Another week, another Binance Smart Chain flash loan attack. The latest decentralized finance project to suffer a flash loan attack is Impossible Finance. The BSC project lost $500,000, with security experts revealing that the attackers used the same exploit that drained $7 million from BurgerSwap a month ago. However, the project has assured its users that their funds are safe.
At 4 AM UTC, Jun 21, $0.5M was stolen from Impossible Finance.
The hacker made multiple swaps in a row at about the same price and drained the LP, which is usually impossible.
How does Impossible Finance make the impossible possible?
Read our analysis:https://t.co/3r0p1dOFWz
— WATCHPUG (@WatchPug_) June 21, 2021
BSC has recorded explosive growth as it offers a cheaper and faster alternative (albeit majorly centralized) to Ethereum. DeFi projects have preferred BSC as transaction fees are a few pennies, while on Ethereum these costs have shot up to as high as $45 as recently as in May.
However, BSC has been the unfortunate target of unceasing flash loan attacks. A flash loan attack is when an attacker takes out a flash loan (which is a form of an uncollateralized loan) from a DeFi platform and then uses it to manipulate the market in his favor.
Impossible Finance is the latest victim. As the project revealed on Twitter, the criminals attacked the platform and targeted its IF swap. IF is the platform’s native token. “User’s funds are safe and remain our number one priority. Thank you for your support and we are confident for a full recovery from this isolated incident,” the platform stated.
Impossible Finance suffered from a similar exploit as BurgerSwap, a BSC platform that was attacked in May and lost $7.2 million. While revealing the similarity of the attacks, Mudit Gupta, a core developer at Sushi Swap posed the question, “If the original project gets hacked, why don’t the forks react?”
Impossible finance got exploited today for $500k.https://t.co/mzCPRluOjn
Same exploit as the burger swap one:https://t.co/3PkVtn7Hi7
If the original project gets hacked, why don't the forks react?
— Mudit Gupta (@Mudit__Gupta) June 21, 2021
Impossible Finance raised $7M three weeks ago
The attack on Impossible Finance comes less than a month since the platform raised $7 million in a seed funding round. The round was led by Alameda Research, the trading firm founded by billionaire FTX exchange CEO Sam Bankman-Fried, with the platform revealing that in total, 125 investors participated.
While it launched on BSC, the platform promised to support Ethereum and Polygon in the near future.
On Telegram, the team further assured users that their funds were safe, stating:
We have also prepared an insurance fund to ensure that your funds are safe and remain our number one priority. All users funds who deposited into liquidity pools (“LPs”) PRIOR to the attack will be 100% compensated.
The IF token has managed to hold its own, despite the attack. In the past day, it has surprisingly recorded a gain, albeit a small one at 1.9 percent. It’s trading at $1.94. However, over the past seven days, it has plummeted, at one point trading at $7.6 before plunging to $0.14 yesterday. The price drop preceded the attack.