DeFi protocol Velvet Capital, backed by the world's largest exchange Binance, was forced to take drastic action by temporarily shutting down its website. The incident occurred at a time when the protocol was changing security measures to protect users from hacker attacks. On April 22, Velvet Capital released the RPC bloXroute Protect tool, designed to protect against sandwich bot attacks, as well as MEV Frontrunning attacks.
A day after Velvet Capital introduced the new tool, the website was attacked, putting users' funds at risk. Clients reported unusual activity on the protocol’s website, where for some reason they were being asked to confirm access to their wallet when connecting to the external interface. The Velvet Capital team has issued a warning: Users are strongly advised not to connect their digital wallets or transact with the protocol until further notice. Security experts are now investigating the incident.
Velvet Capital founder Vasily Nikonov assured that smart contracts and client funds are safe. He suggested that users who approved transactions on Velvet Capital from April 23 at 5:39 UTC (8:30 Moscow time) could become victims of the cyber attack. Those affected need to submit a request to the Velvet Capital team to rectify the situation.
Recently, hackers discovered a vulnerability in the decentralized finance protocol Hedgey Finance. The attackers withdrew at least $1.9 million.
Source: Bits
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