Level Finance suffers $1 million hack amid buggy smart contract exploit, loses 214K LVL tokens

Level Finance, a renowned decentralized exchange (DEX) is the latest victim of an exploit. Based on a recent report, the company suffered a security breach that saw the exploiter steal over $1 million of the exchange’s ticker token, Level Finance (LVL). The news first came in an official Twitter post from the company, informing its 20,000 followers about the exploit.

Based on the revelation, the threat actor drained over 214,000 LVL tokens from the exchange before swapping them for 3,345 Binance Coin.  Based on current rates, the loot has an approximate value of $1.01 million. 

Mechanism of the exploit, Peckshield

Peckshield, a popular blockchain security firm, has investigated the exploit. An excerpt from the firm’s report states:

Level Finance’s ‘LevelReferralControllerV2’ smart contract contained a bug that allowed for ‘repeated referral claims’ from the same epoch.

Level Finance later confirmed the statement made on Discord.

According to data from Binance chain explorer BSC Scan, the V2 controller smart contract reveals several calls of the ‘claim multiple’ function over the past two days. Meanwhile, as of press time, the implementation of the smart contract seems unaltered since the attack began. Nevertheless, the decentralized exchange has committed to deploying a new implementation of the referral contract over the next 12 hours.

Further, Level Finance DEX also highlighted that its liquidity polls (LP) associated with decentralized autonomous organizations (DAOs) were not affected during the attack.

In a Twitter statement, user @DeDotFiSecurity, acknowledged the Level Finance team saying they had “temporarily shut down the referral program,” to stop the attack as interventions continue.

Meanwhile, Level Finance told its Discord community that the attack had been isolated from other exploits, adding platform users should “stand by for a full post mortem.”

Level price reacts to massive sell-off

Level (LVL) price has reacted to the exploiter selling the altcoin, dropping almost 25% in the last 24 hours to exchange hands at $6.94 at the time of writing.

LVL/USDT 3-hour chart

Notably, Level price recorded an intra-day low of $2.90, representing a 60% descent before a pullback to the current level. The massive sell-off came as LVL holders succumbed to panic and hedged their holdings.  

Crypto Twitter appears positive about the exploit after the DEX explained the incident.

Those who bought the dip at the $2.90 low have made some money, while others await a possible correction in Level price.