GMX Tokens Worth $3.4 Million Stolen in Phishing Attack on Whale

A DeFi whale lost $3.4 million worth of GMX tokens following a phishing attack on Jan. 3, according to PeckShield and CertiK. The hackers reportedly stole 82,519 GMX tokens and swapped them for 2,627 ETH.

Hackers Stole 82,519 GMX Tokens and Swapped them for ETH

According to blockchain security firms PeckShield and CertiK, a decentralized finance (DeFi) user sustained a major phishing attack, where hackers stole $3.4 million worth of GMX, a native token of the DeFi protocol GMX.

The token has been one of the best performers in November after a massive investor exodus to DeFi platforms in the wake of the FTX collapse.

The exploit was reported after multiple community members noticed suspicious GMX token activity. Data analysis platform Lookonchain said the perpetrators stole 82,519 GMX tokens before swapping them for 2,627 ether (ETH).

The hackers then cross-chain the funds to the Ethereum network using cross-chain bridges, a popular tool used by hackers for money laundering. The stolen funds were spotted in this wallet, according to PeckShield.

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Phishing Attacks and Crypto Scams on an Upward Trajectory

The attack raised discussions among the community members over the risks associated with self-custody. One of the members said the phishing attack emphasizes “the dark side of self-custodial wallets.”

Phishing attacks have been gaining traction in the burgeoning crypto space. Earlier today, the COO of Nike’s crypto business RTFKT, lost $175,000 worth of NFTs in another phishing exploit.

“I was hacked by a clever Phisher (same phone # as apple ID) & sold all my clone x / some other nfts,” Nikhil Gopalani said in a tweet.

– Nikhil Gopalani, COO of RTFKT, said in a tweet.

The sharp increase in hacks and scams in the crypto space prompted global watchdogs to increase regulatory oversight. UK’s top crime-fighting agency is setting up a specialized unit known as “Crypto Cell” to fight crypto scammers.

A recent research report by TRM Labs showed that a record $3.7 billion worth of crypto funds were stolen in 2022, the majority of which was drained from DeFi hacks. The report identified ten mega hacks last year, representing 75% of the stolen total.

Why are DeFi hackers stealing more crypto funds than ever? Let us know in the comments below.

About the author

Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird’s US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.