Solana exploit alert: Exploiter behind $100 million Mango Markets hack issues warning

Solana based Mango Markets allows users to trade crypto on Solana for spot margin and trading perpetual futures. This platform was exploited for $100 million through price manipulation and the attacker submitted a proposal on the governance platform asking the project to pay off its bad debt. 

Also read: Bitcoin price: The slingshot is pulled back, BTC ready to test $16,900?

Solana based Mango Markets drained for $100 million

Mango Markets, a Solana-based DeFi lending platform was exploited through price manipulation. OtterSec, a blockchain auditing firm, noted that hackers boosted the value of the collateral and withdrew massive loans from the Mango Markets treasury. 

The attacker funded an account with 5 million USDC collateral and offered 483 million units of MNGO perpetual contracts on the markets’ order book. Following this, they repurchased the MNGO perpetual contracts at $0.03 each. The attacker began manipulation at 6:26 PM ET and pushed MNGO price from $0.03 to $0.91. Procuring a loan of $116 million from the Mango Markets Treasury, the attacker drained the platform of its liquidity. USDC, MSOL, SOL, BTC, USDT, SRM and MNGO were hit by the hack. 

The attacker used USDC to push MNGO price from $0.02 to $0.91 within a ten-minute span. Its important to note that an attack of this nature cannot be orchestrated on centralized exchanges. Since MNGO was a thinly-traded token with low liquidity on the platform, price manipulation was easy for the exploiter. 

Hacker then proposed that the platform initiate no legal action against them, despite effectively wiping out the protocol. The post on the governance platform reads:

hi all, the mango treasury has about 70M USDC available to repay bad debt. I propose the following. If this proposal passes, I will send the MSOL, SOL, and MNGO in this account to an address announced by the mango team. The mango treasury will be used to cover any remaining bad debt in the protocol, and all users without bad debt will be made whole. Any bad debt will be viewed as a bug bounty / insurance, paid out of the mango insurance fund.

MNGO nosedived, 31% decline overnight

The attack resulted in a 31% decline in Mango Market’s token (MNGO) yielding double-digit losses for holders. Despite consistent hacks and exploits on its blockchain platform, Solana price held steady above the $30 level.