Decentralized Finance (DeFi) platform Delta Primes suffered a security breach on Monday, affecting the protocol’s users. The attack took $6 million from the project’s pools and is under investigation. However, on-chain investigators suspect it could be linked to North Korean hackers and be part of a larger-scale scheme.

Hackers Drain $6 Million From DeFi Protocol

On Monday morning, cyber security platform Cyvers Alerts informed the community about the ongoing attack on DeFi borrowing protocol Delta Primes. The initial report revealed that Cyvers’ system had detected multiple suspicious transactions involving the project on the Arbitrum chain.

The transactions suggested the DeFi protocol’s team had lost the private key, initially losing $4.5 million from the DPUSDC, DPARB, and DPBTCb pools. The suspicious draining address immediately swapped the USDC for Ethereum (ETH).

In the next hour, Cyvers detailed that the attackers had seemingly changed the proxy, pointing to a malicious address. Other reports explained that “this malicious contract can inflate the deposited amount of the hacker on all pools.”

The attackers drained another $1.48 million from the pools before Delta Prime’s team regained control. Two hours after the initial reports, the DeFi platform addressed the incident.

Per the post, DeltaPrime Blue, on the Arbritum chain, was attacked and drained for $5.98 million. The team confirmed that the attack was due to a compromised private key, with the cause still being investigated.

Delta Prime’s team also assured users that DetalPrime Red, on Avalanche, was safe from this attack, detailing that the “implementation here is covered solely by multisigs and cold wallets (as it should be).”

Additionally, the post claimed that the risk was already contained, reassuring its community that the DeFi protocol’s insurance pool would cover potential losses:

The risk is contained, we’re working on asset-retrieval and the insurance pool will cover any potential losses where possible / necessary. Additionally, we’re looking into other ways to reduce user losses to a minimum.

Are North Korean Hackers Responsible?

Despite the quick response, some users expressed their concerns about the incident. When questioned about it, the team explained that there were no timelocks for DeltaPrime Blue:

This is exactly what timelocks are for. The switch from this hot & non-timelocked owner to a cold timelocked owner should have been done on Arbitrum like it was on Avalanche (and like other initial owners on Arbi)

One community member criticized the team for not having the same security measures on DeltaPrime Blue and Red, stating there was no excuse for the mistake. Moreover, on-chain sleuth ZachXBT suggested that the attack could be linked to a larger-scale problem.

A month ago, Zach assisted another team with another crypto hack. The investigation unveiled that over 25 projects within the space had unknowingly hired multiple IT workers from North Korea using fake identities as developers.

Today, the crypto detective revealed that the DeFi protocol was among the teams he alerted about the North Korean IT workers in August. He also noted that the method used for Delta Prime’s exploit was similar to the hack he originally assisted.

As of this writing, Delta Prime’s team has not addressed the possible link. However, it stated that they would focus on getting the funds back and that “the event isn’t over yet.”