Analysis of Google Trends suggests that searches for “mango markets” have spiked in the past 30 days due to the rampant cryptocurrency theft on the platform.
A new finding by the financial information website Safetradebinaryoptions analyzes the new type of theft surrounding the crypto market.
Saqib Iqbal, an author at Safetradebinaryoptions, commented on the findings:
“Smart contracts conduct transactions on Decentralized Finance (DeFi) trading platforms. Because no third party is engaged, hackers use the gap to attack the network and drain money from it. How the hacker controlled the price of the Mango token could not be accomplished on a centralized exchange.”
On October 10, 2022, a crypto hacker used millions of dollars to manipulate the values of Mango's MNGO tokens on the platform's decentralized exchange, managing to drain nearly $116 million in liquidity.
The hacker was able to withdraw various digital assets, most of which were stablecoins, including:
$53.7 million in USD Coin,
$3.2 million in Tether, and
$5 million in Bitcoin, among others.
The hacker altered the price of native token Mango (MNGO) collateral, depleting the platform of huge loans, according to OtterSec, a security audit that drives blockchain.
The question is: how did this happen?
Before initiating an extremely large long position, the attacker deposited 5 million USD Coins (USDC) to the network. He purchased 438 million Mango tokens, swiftly collecting $420 million in unrealized profits.
MNGO's price soared by almost 1000%, increasing the collateral value of the hacker's account. He finally wiped out the protocol by stealing more than $116 million in liquidity from all outstanding tokens.
The hacker then proceeded to take out a $116 million loan, placing Mango's treasury in a negative balance of 116.7 million.
The Mango platform hack is the latest in a series of crypto breaches with losses over $100 million this year.
In October, Binance was hacked and lost at least $100 million.
Harmony, a blockchain business, said that $100 million in crypto was stolen from its network in June.
A $322 million attack on the Wormhole cryptocurrency network occurred in February.
Over $600 million was stolen from the Ronin Network in March.
Speculation is that much of this large-scale theft might be a result of the startling increase in revenue stolen via DeFi protocols in 2021. DeFi protocols are uniquely prone to hacking because their open-source code can be studied for vulnerabilities.
It’s also possible that protocols' incentives to reach the market and keep growing lead to oversights and failures in security practices.
Furthermore, we cannot anticipate theft to decrease in response to cryptocurrency market fluctuations in the same way that scamming does.
The fact is that as long as crypto assets housed in DeFi protocol pools and other services are valued and exposed, bad actors will attempt to access them.