Gamma Strategies Halts Deposits After $3.4M Hack

Gamma Strategies, an Ethereum-based liquidity management protocol, has encountered a security breach. This incident, involving an unauthorized extraction of $3.4 million in digital assets, has prompted Gamma to take unusual steps in its aftermath management. PeckShield, a blockchain security firm, played a crucial role in identifying and quantifying the extent of this exploit.

Gamma’s Proactive Response to Security Breach

Initially, the loss was estimated at around 211.9 Ether (ETH), valued at approximately $469,000. However, subsequent assessments by PeckShield revealed that the total damage extended to $3.4 million. In an unexpected turn of events, a considerable portion of the stolen funds, amounting to $2.2 million, was tracked to Tornado Cash, a cryptocurrency mixer.

Bounty Negotiation Efforts

In response to this crisis, Gamma Strategies has immediately suspended all deposit activities in its vaults while maintaining the withdrawal option for its users. This decisive action aimed to prevent further exploitation of the system’s vulnerabilities. Furthermore, Gamma Strategies has initiated a direct communication channel with the hacker, offering a bounty in exchange for the return of the stolen assets.

The Gamma team has identified the root cause of the attack. They have assured their community that by disabling deposits to the public-facing vaults, they have effectively mitigated the risk of additional losses. This proactive approach highlights the importance of swift and strategic actions in the face of digital security threats.

Future Steps and Assurance

Gamma Strategies is now focusing on comprehensive remedial measures. A key aspect of their recovery plan involves obtaining a third-party code review. This is to ensure that the vulnerabilities exploited in the attack are thoroughly addressed before any resumption of deposit services. In addition, the protocol is committed to prioritizing the recovery of affected users, ensuring minimal long-term impact from this incident.

Additionally, Gamma Strategies has extended its apologies to those impacted by the breach. They have pledged to release a detailed analysis of the incident along with a well-formulated remediation plan. This commitment to transparency and accountability is a crucial step in restoring trust within their user base.

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Kelvin is a distinguished writer specializing in crypto and finance, backed by a Bachelor’s in Actuarial Science. Recognized for incisive analysis and insightful content, he has an adept command of English and excels at thorough research and timely delivery.

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