Cryptocurrency bridge Nomad has lost nearly all of its funds as a result of a hack described by experts as chaotic. Losses total nearly $200 million, but the company appears hopeful that it will recover at least some of it.
Nomad, which describes itself as a ‘security-first cross-chain messaging protocol’, enables users to trade tokens between different blockchains.
According to researcher ‘samczsun’, the Nomad team made a mistake during a routine upgrade, which allowed messages to be spoofed. This was exploited to copy/paste transactions and quickly drain the bridge in what the researcher described as ‘one of the most chaotic hacks that web3 has ever seen’.
A user with the online moniker ‘foobar’ pointed to an audit conducted this year by blockchain security firm Quantstamp led to the discovery of 40 issues in Nomad systems, including a flaw that appears to have been involved in this hack. The auditors assigned the issue a low risk rating and Nomad did not address the problem. However, Quantstamp noted that the Nomad team had misunderstood the issue.
It appears that since the exploit was easy to launch — users only needed to copy the original hacker’s transaction and replace the address with their own — multiple people took advantage of the vulnerability to take funds from Nomad.
However, Nomad believes that many of them are actually white hat hackers or security researchers who transferred tokens into their own addresses to prevent ill-intended individuals from taking them. The service believes these white hats took the funds with the intention of returning them and it has provided a wallet address where they can be returned.
An investigation has been launched in collaboration with chain analysis and intelligence firms, and law enforcement has been notified.
Threat actors have increasingly targeted blockchain bridges. Victims include Horizon, from which hackers stole $100 million, Ronin Validator, which lost $600 million, and Wormhole, which lost $300 million.
North Korean hackers are believed to be behind the Ronin and Horizon attacks. North Korea reportedly stole $400 million worth of cryptocurrency in 2021.
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