Gem Pad token launchpad is posting suspicious transactions, on-chain investigation shows. The platform for token launches and sales was mined for an estimated value of $2.2 million.
Gem Pad is sending suspicious transactions, pointing to a multi-chain and multi-token exploit. The Gem Pad team immediately mitigated the attack and explained that multiple security locks had been breached.
IMPORTANT ANNOUNCEMENT
As some of you may have noticed, an incident occurred last night where someone managed to breach our security locks.
We immediately reached out to all of our partners and experts in the space to investigate and resolve the situation. The problem now has been…
– 𝗚𝗲𝗺𝗣𝗮𝗱 (@TheGemPad) December 17, 2024
Code analysts noted that the reason for the attack was a re-entry into one of the functions that creates a token lock. the malicious token transfer allowed the hacker to recover liquidity from several projects.
The affected tokens came from three main chains: Ethereum, Base, and BNB Smart Chain. The GempadLock smart contract was the faulty entry point due to the lack of reentry protection.
The feat occurred despite the recent audit by Cyberscope. GemPad even received a high security score, although the flaw was found within a function in a smart contract.
After news of the exploit, the GEMS token slowly retreated to $0.11. The Gem Pad platform’s native token already fell in the second half of 2024 and is now trading at around $0.11.
Gem Pad Projects Face Fallout from Token Theft
The attacker extracted resources from Gem Pad’s security locks, then exchanged them for ETH and BNB and consolidated the loot. According to Gem Pad, only a handful of projects were affected, but the platform is now secure and back online. Only the Locker service will not be available until further announcement.
Token locks on Gem Pad are smart contracts that hold some of the tokens transparently, ensuring that they will not be sold in an instant. Launchpads remain a tool for distributing new tokens, in addition to meme token markets. Launchpad volumes have declined, but Gem Pad has managed to attract a pipeline of projects.
While the Gem Pad itself is not compromised, it remains the central point of failure, due to the logic of its smart contract. However, the affected projects and communities are the ones who absorbed the losses.
Five projects affected by depleted liquidity
The Munch Protocol was one of the projects that had its token lock attacked. However, the protocol announced that your funds are safe and unaffected, and can be recovered with the help of Gem Pad. Munch Protocol tokens are not yet trading and have not felt the side effects of the hack. The protocol has not mentioned how it managed to keep its funds safe and whether it has absorbed any direct losses.
The Nutcoin ecosystem was another project affected by the blocking attack. This time, all the project’s liquidity has been exhausted on Ethereum. At one point, four proceedings of 100 ETH were sent directly to Tornado Cash, making them essentially unrecoverable.
Anon was another project with depleted liquidity, with 3.6 million dollars in exposed value. The Anon community on Base is not affected and personal wallets are safe. While $2.2 million has been accounted for to date, there may be a larger final accounting for all the lost tokens.
The FOMO network too reported its liquidity pool on the launch pad was depleted. As a result, the native FOMO The token fell from $0.004 to $0.00098. The trick too affected the recently launched DUB token by one of the partners of Alien Base DEX, a trading application on the Base chain.
The hack also affected the liquidity of BPAY chips. The exploiter sent BPAY tokens directly to Uniswap V2 and then converted the loot into WETH. Immediately after the news, BPAY passed 75%from $0.004 to $0.001.
While the Gem Pad attack was relatively small in terms of stolen funds, the aftereffects erased even more liquidity from the market. The loss may also further compromise the integrity of the affected tokens and projects.
The attack occurred at a time when Gem Pad was expanding its activity on Base and publishing more content to attract investors to its launchpad projects. Multiple new launches are expected in the coming days, although for now no explanation has been given regarding the new method of locking liquidity.
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