- Odin.fun co-founder Bob Bodily announced that the platform‘s treasury is not in a position to cover losses.
- Affected Odin.fun users may have to wait longer to be made whole again via the platform’s revenues.
- Trading on the Odin.fun platform has been paused to give the auditing team up to a week of code analysis.
Odin.fun, a memecoin launchpad on the Bitcoin network, has been siphoned 58.2 BTC, valued at about $7 million. The Odin.fun compromise happened on Wednesday, with on-chain data analysis showing involvement from China-based hacking groups.
According to Bob Bodily, the co-founder of Odin.fun, the company’s treasury is not sufficient to cover the losses incurred by users following the attack. Nonetheless, Bob assured the users that the rest of the funds are safe, especially after pausing trading.
“Today we discovered a major exploit in our liquidity AMM which was introduced in our latest update. Several malicious users, primarily linked to groups in China, took advantage of this vulnerability to steal a significant amount of BTC from the platform,” Bob noted.
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How the Odin.fun Attack Happened
According to on-chain data analysis by PeckShieldAlert, the Odin.fun attack was due to a weak security design on the smart contract. Notably, the Odin.fun platform recently introduced an upgrade to its liquidity pool management, which was compromised by the Chinese hackers.
Specifically, the Chinese attackers added liquidity to a meme token on the Odin.fun platform. The attackers then inflated the net value of the token, which attracted more organic traders to catch a bull wave.
Related: China Cracks Down on $19.5M Crypto Money Laundering Ring Using Mixing Services
However, the attackers then removed the Bitcoins from the liquidity pools, resulting in a sudden valuation drop of the respective tokens. As a result, the Bitcoin balance on the Odin.fun platform has dropped to about 232.8 BTCs.
What are the Measures to Make Users Whole Again?
According to Bob, measures are in place to make the victims whole again, despite the low balance in the company’s treasury. Bob noted that the platform will resume trading once an audit on the code has been completed, which could take up to a week.
Meanwhile, the Odin.fun platform has engagement with the U.S. law enforcement in addition to Binance and OKX to help identify and recover the stolen funds.
“We have already identified several groups who profited from the exploit, and they will be pursued in China and prosecuted domestically (especially considering the amount of evidence we have, including the activities of their wallets),” Bob added.
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