Velocore DEX Security Breach: $10 Million Vanishes in Latest Hack

Velocore, a decentralized exchange (DEX) operating on the zkSync and Linea blockchains, has suffered a significant hack, resulting in a loss of approximately $10 million. This incident underscores the persistent security challenges faced by the cryptocurrency sector.

The breach, which saw hackers transferring over 700 ETH to the Ethereum mainnet, was initially reported by a threat researcher known as "Officer’s Notes." Despite passing security audits conducted by Zokyo, Hacken, and Scalebit, Velocore's security was compromised. The hackers targeted the exchange's liquidity provider tokens, essential for its operations.

During the hack, the Linea Blockchain experienced a one-hour halt in block production, though the reason for this disruption remains unclear. However, operations resumed following the pause. Fortunately, Velocore's stable pools remained unaffected, allowing users to withdraw their funds.

Velocore has initiated collaboration with centralized exchanges (CEXs) to freeze the stolen assets and mitigate further damage. The team is actively identifying the exploit mechanism and tracking the hacker using available clues. While affected community members demand refunds, Velocore has yet to announce any compensation plans.

Despite undergoing security audits from reputable firms, the Velocore hack highlights the ongoing vulnerabilities within the crypto sector. This incident adds to a series of security breaches, including the recent $305 million loss reported by Japanese exchange DMM Bitcoin. In 2024 alone, excluding the DMM Bitcoin breach, the industry has lost over $473.22 million to various hacks, with May 2024 witnessing 21 incidents resulting in losses exceeding $52 million.

Moving forward, Velocore and other crypto exchanges must bolster their security frameworks through regular audits, constant monitoring for unusual activities, and collaboration with cybersecurity experts. Users should prioritize platforms with robust security protocols and diversify their holdings to mitigate risks.

The $10 million hack of Velocore DEX underscores the pressing need for stronger security measures across the crypto industry. While Velocore is working to address the breach, this incident highlights the ongoing challenges in safeguarding digital assets. As the crypto landscape evolves, enhancing security strategies remains imperative to protect users and uphold trust in the sector.