BSC’s Impossible Finance: The Latest Victim of DeFi Flash Loan Attack Lost $500,000

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BSC's Impossible Finance: The Latest Victim of DeFi Flash Loan Attack Lost $500,000
BSC's Impossible Finance: The Latest Victim of DeFi Flash Loan Attack Lost $500,000

On a new day, another DeFi flash loan in the Binance smart chain is exploited. This time the victim was Impossible Finance, a multi-chain incubator project.

According to posts on the project’s Twitter and Telegram feeds on June 21, Impossible Finance’s liquidity pool was attacked by lightning loans, resulting in a loss of about 230 ETH.

“Earlier today there was a flash loan attack on our IF token. We are working with PeckShield, Watchpug, and other community whitehats to investigate the situation and will have a detailed event report.”

Similar DeFi Attackers

SushiSwap core developer Mudit Gupta pointed out that this was similar to the attack with the BurgerSwap protocol at the end of May. At that time, the attackers managed to withdraw more than $7 million from the agreement to execute the flash loan with fake tokens.

Security firm WatchPug stated that hackers performed multiple back-to-back swaps at roughly the same price and depleted the pool of liquidity, adding that “usually not possible” due to slippage.

A weak point in the smart contract of the mining pool enables the attacker to exchange the native token IF of the protocol several times for BUSD and then to BNB to repay the flash loan.

Impossible Finance’s team confirmed on Telegram that it has allocated an insurance fund to compensate liquidity providers.

“We have also prepared an insurance fund to ensure that your funds are safe and remain our number one priority. All users funds who deposited into liquidity pools (“LPs”) before the attack will be 100% compensated.”

Impossible Finance raised $ 7 million from an extensive roster of venture capital and angel investors in early June to help establish a BSC incubator platform for multi-chain DeFi startups.

It joins a long list of BSC-based DeFi agreements used this year, including PancakeBunny, Cream Finance, bEarn, Bogged Finance, Uranium Finance, Meerkat Finance, SafeMoon, Spartan Protocol, and Belt Finance.

The BSC itself claimed that this wave of attacks was organized and targeted.

Impossible Finance Token Price Sinks

It is foreseeable that the IF token collapsed today, falling more than 60% from a high of $2.80 on June 21 to a low of $0.14, and then recovering to just over $1 at press time.

According to data from CoinGecko, IF’s current transaction price is 86% below its all-time high of $7.61 on June 19.