Uniswap Under Attack: $8M Lost in ETH as Users Succumb to Phishing

The hackers imitated Uniswap’s website and many believed.

  • Over the span of the phishing attack, 7,500 ETH was snatched in NFT positions on the liquidity pool.
  • Binance CEO Changpeng “CZ” Zhao, and Uniswap founder Hayden Adams confirm that the “protocol is safe”.
  • Uniswap (UNI) is down 6.4% in the last 24 hours.

Uniswap has become the latest victim of a phishing attack, which have become a trademark scheme by crypto hackers in 2022. This time, Uniswap’s V3 liquidity pool (LP) suffered an exploit in which NFT positions worth approximately $8.1 million were illicitly acquired.

To trick the pool provider into signing malicious transactions, the hacker group impersonated Uniswap’s site, successfully looting over 3,278 Ethereum (ETH) tokens, worth around $3,498,740.52 USD at press time price.

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It transpired that the phishing scam was part of a wider attack, as pointed out by analyst Harry Denley. According to Denley, the fake airdrop presented by the fraudsters asked Uniswap users sign into MetaMask, thus enabling the enormous amount of 7,500 Ethereum (ETH) to be snatched away, worth approximately $8,017,152.86 USD. 

Eventually, the looted ETH was split 100 ways, and transferred onto Tornado Cash, the cash service favored by the infamous North Korean hacking organization Lazarus Group, notorious for the theft of large quantities of funds which are later used for nuclear testing by the country’s regime.

CZ Ringing the Alarm

Binance CEO Changpeng “CZ” Zhao was quick to realize that something fishy was going on, and offered a helping hand on Twitter. He connected with Hayden Adams, the founder of Uniswap, to help protect the protocol. The two confirmed that the liquidity pool had suffered a phishing attack, caused by misled users who had clicked on a fake link.

A Hack or a Well Executed Phishing Attack?

As diagnosed by Mr. Adams, “It was a phishing attack that resulted in some liquidity pool NFTs being taken from individuals who approved malicious transactions”. He then reasoned that this should be taken as a cautionary tale, saying: “It’s a good reminder to protect yourself from phishing and not click on malicious links”.

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Moreover, Mr. Adams assured the community that the attack was not the result of an internal breach of the Uniswap Protocol; in other words – it was not a hack. Despite this, rumors are already circulating on Twitter, with phrases such as “Uniswap hack” and “Uniswap hacked” trending on Tuesday morning.

To sum up, the exploit was suffered by the protocol’s liquidity provider, but the transactions themselves were approved by separate people. Ultimately, it can still be seen as a “hack” in a broader sense of the word, even though Uniswap’s internal ecosystem remained unaffected.

Why You Should Care

2022 has seen a plethora of successful phishing attacks already, therefore It’s important to understand how hackers operate in order to not fall victim to their traps.

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Tadas Klimasevskis

Tadas Klimaševskis is a Lithuanian journalist at DailyCoin, specializing in covering the lighter side of the crypto industry such as memecoins and pop culture in the metaverse. He has experience as a music artist, English language teacher, and freelance writer, and uses his creative writing skills to summarize valuable information in his work. He is also a strong believer in the potential of blockchain and spends his free time listening to music, traveling, and watching basketball games.