On October 16, 2024, decentralized finance (DeFi) platform Radiant Capital became the latest victim of a massive crypto hack, losing over $50 million worth of assets. Hackers exploited a vulnerability during a routine transaction process on the Arbitrum and Binance Smart Chain (BSC) networks. By gaining control over multiple private keys, the attackers managed to alter Radiant’s smart contracts and siphon funds directly from users’ accounts.
This breach marks the second major hack Radiant has faced this year, with previous incidents highlighting vulnerabilities in DeFi platforms. Following this attack, the hackers converted the stolen funds into Ethereum (ETH) and Binance Coin (BNB), raising concerns about a potential sell-off that could impact market conditions.
How Did the Hack Happen?
The attackers used a sophisticated approach to breach Radiant Capital’s defenses. The hack originated from the compromise of three of Radiant’s core developers’ hardware wallets. Through malware injections, hackers were able to sign malicious transactions while making them appear legitimate in Radiant’s wallet interfaces. As a result, the hack went undetected until it was too late.
The breach took place during a routine multi-signature transaction process that requires several wallet signatures to authorize any transaction. Once the developers unknowingly signed the malicious transactions, the hackers gained full control of the system, allowing them to transfer assets across multiple chains, including Ethereum and Binance Smart Chain.
Movement of Stolen Funds: $52M Transferred to Ethereum
The tokens were quickly converted to other digital currencies, such as Ethereum & BNB. The hacker now controls 12,835 ETH (worth US $33.56 million) and 32,113 BNB (worth US $19.35 million), according to fund chain statistics
The transfer of such a large sum of digital currency to Ethereum is causing concern that it may be sold off. This could have an impact on the entire market.
A sell-off of this size often causes market disruption, especially for volatile assets such as Ethereum. Although ETH has been in an uptrend lately, tens of millions of dollars will stop its momentum
Now, observers are watching closely. This would cause a dip in the price of Ethereum, which is still highly sensitive to liquidity changes.
Community Reactions and Concerns
In light of the Radiant Capital hack, DeFi figures such as Deebs_deFi raised concerns about the degree to which the attacks could be undertaken and the possible consequences on other parts of this financial system. Deebs pointed out the dangers of multiple-signature wallets. He called on platforms to reconsider the framework of security.
Justice was not served.
95% of stolen funds ($50M+) from the radiant hack have now been sent to exchanges to move off-chain or deposited into various DeFi protocols.
Let this serve as a cautionary tale to always revoke access, no matter how long ago it was. pic.twitter.com/zpbUxDrQx5
— Deebs DeFi 🛰 (@Deebs_DeFi) October 23, 2024
Radiant Capital’s Response and Market Impact
In response to the attack, Radiant Capital has halted its lending operations on both Arbitrum and BNB Chain to prevent further damage. The platform works with law enforcement agencies and blockchain security experts to trace stolen funds and potentially recover them. However, given that the funds have already been swapped into Ethereum and Binance Coin, recovery efforts face significant challenges.
Radiant has also issued warnings to its users, advising them to revoke any approvals on all connected chains, including Arbitrum, Ethereum, and BSC, to mitigate further risk.
Despite these measures, the market remains on high alert, with analysts debating the possible fallout from a large-scale sell-off by the hacker.
The crypto market, which had started the week on a positive note, is now showing signs of stagnation due to the uncertainty caused by the Radiant hack. The overall market cap remains stable at $2.32 trillion, but the Fear and Greed Index suggests that sentiment is veering toward greed, indicating heightened volatility.
Conclusion
The recent security breach on Radiant Capital is yet another reminder of the risks inherent in DEFI platforms. Even as security protocols are constantly being improved, hackers still find dispensable methods of attacking another front–causing widespread losses. With the stolen crypto now hovering on Ethereum, the community is stealing itself for a possibly turbulent sell-off that could knock the market’s precarious recovery off its feet. While Radiant and associates co-operate to retrieve those stolen funds, the case finger points to the necessity for more solid security measures in this rapidly changing new world of decentralized finance.
