Hackers Drain $40 Billion from GMX Platform

A major security breach has rocked the GMX platform, resulting in a staggering $40 billion loss. The incident, confirmed by the GMX team, sent GMX Coin prices plummeting to $11.5, fueling concerns about potential further declines. Despite the turmoil, the possibility of volatile leveraged positions remains a key risk, predicted to trap both bulls and bears.

How Did GMX Coin Prices Drop So Drastically?

A considerable $40 million loss for customers has come to light as the hack unfolded, driving the GMX Coin’s value to fall sharply to $11.5, with a near 25% daily decline. The team has yet to roll out a compensation plan, but its introduction could trigger a swift short position liquidation.

Was GMX Able to Mount an Effective Response?

In response to the cyberattack, the GMX team confirmed their awareness and ongoing investigation into the breach.

“The GLP pool on GMX V1 on Arbitrum was attacked. Approximately $40 million worth of tokens were transferred from the GLP pool to an unknown wallet. Security has always been a top priority for GMX, with smart contracts undergoing numerous audits by leading security experts. As a result, all core contributors are investigating how the manipulation occurred and identifying the possible security breach that allowed it in this critical moment.”

Among the immediate actions taken were the suspension of transactions and GLP minting on GMX V1 across both Arbitrum and Avalanche networks, aiming to safeguard users and prevent further exposure to risks.

This breach was isolated to GMX V1 and the GLP pool, leaving GMX V2 and other core GMX assets unaffected. A comprehensive report on the breach will be issued when more details emerge, the team assured.

Notably, GMX released guidelines to those utilizing GMX forks, warning them of the vulnerabilities exposed by the attack.

“For all GMX V1 forks, the warning is that ‘GMX V1 has been hacked.’ Disable the leverage feature: This can be done by setting Vault.setIsLeverageEnabled(false) or, if using Vault Timelock, setting Timelock.setShouldToggleIsLeverageEnabled(false).

The sentiment has remained relatively stable after the team vouched for the security of remaining assets, with GMX Coin’s price slightly bouncing back to $11.8. The introduction of a compensation scheme could further bolster recovery efforts.