Kyber Network Token Rises Despite USD 265K Exploit, Team Praised for Swift Action

Source: Adobe / bankrx

The price of kyber network crystal (KNC), a utility token for the Kyber Network ecosystem, rose on Friday after a front-end exploit that drained at least $ 265,000 from the decentralized multi-chain exchange, aggregator Kyber Swap was spotted a day earlier.

As of Friday at 09:10 UTC, KNC was trading at USD 1.756. The token has risen nearly 4% in the past 24 hours, but has remained down 3% over the past 7 days. The token therefore outperformed other major currencies such as bitcoin (BTC) and ethereum (ETH), which were up 1% and 3% respectively over the last day.

According to a KyberSwap notice, an exploit of the DEX aggregator was identified on September 1, which led the KyberSwap team to shut down the aggregator front-end. After conducting an initial investigation, the team noticed “malicious code” in their Google Tag Manager. The notice added that this code “entered a false approval, allowing a hacker to transfer a user’s funds to his address.”

KyberSwap’s warning went on to admit that the exploit led to a loss of $ 265,000 in user funds, but claimed that only two “whale” addresses on the Polygon (MATIC) network had been identified as affected.

“This attack was [a front end] exploit and there is no smart contract vulnerability. For now it is safe to use KyberSwap’s features, with caution, “adds the warning, before confirming that all affected users will be compensated for any losses.

In a Message to the attacker posted on Twitter, the Kyber Network team claimed to be aware of the relevant addresses and interactions. “Centralized exchanges have also been informed. You won’t be able to cash out without revealing yourself, “added the message.

In particular, the exploit did not lead to any sell-off of the KNC price. Instead, the token has continued to grow in the market over the past day, moving broadly in line with the broader cryptocurrency market.

Among the reasons for the surprising market reaction to the hack could be the fact that so far it seems relatively small compared to other attacks on DeFi protocols. Other possible explanations include the team’s quick reaction and clear explanation of the event and the fact that they promised to fully refund affected users.

The latter sentiment was shared by some users who commented on the incident on Twitter, with one said it was “a relief to see that the Kyber Network team responded proactively and very professionally to the event they faced.”

“The problem was resolved immediately with full compensation,” added the user.
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