ApolloX, a decentralized cryptocurrency exchange, was purportedly breached Thursday after a hacker discovered a hole in the platform's Trading Rewards Contract.
According to ApolloX, the hacker was able to amass 255 signatures, allowing him to withdraw 53 million APX tokens from the withdrawal contract.
At the time of the incident, the stolen tokens were worth around $2.1 million. Based on data from CoinMarketCap, ApolloX has lost nearly 11 percent in the last 24 hours.
The incident was discovered when the DEX temporarily stopped the withdrawal function on Wednesday, only to restore it later that day.
However, none of the loss is associated with user funds.
But, due to the flaw in the exchange's smart contract, the ApolloX team repurchased 12,748,585 APX tokens worth $600,000 after the attack. Additionally, the company guaranteed that "lost tokens will be compensated for using APX gained through exchange trading fees."
The event also followed ApolloX's announcement that investors, including Binance Labs and Kronos Research, had provided startup funding. The DEX acquired an undisclosed amount of strategic financing to further its Web3 vertical expansion.
ApolloX's founder stated, "Decentralized finance is eating away at centralized finance's market share. As users demand greater control, value, and accessibility, protocols are fast developing in this competitive space."
However, ApolloX also believed that the future of DAO will help abolish centralized leadership and empower the next generation of protocols.
Meanwhile, the exchange's Total Value Locked (TVL) on DeFiLlama is $12,4 million. On the technical aspect, InvestorsObserver has determined that ApolloX may keep a bad short-term technical score of 4, as "recent price action suggests additional unfavorable hints for traders."
Based on a newly published study by the Federal Trade Commission (FTC), since the start of 2021, over 46,000 consumers have lost over a billion dollars in cryptocurrency to scammers.
In a separate investigation, the Australian Competition and Consumer Commission (ACCC) found that between January 1 and May 1 of 2022, Australians lost approximately AUD 113 million or $81.5 million to crypto-related frauds.
Anne Boden, the founder of Starling, a digital bank funded by Goldman Sachs, described cryptocurrency as "hazardous." Boden stated, "Many crypto wallets are being directly linked to payment systems. This poses a threat to the security of our global payment systems."
In an effort to take advantage of any weakness in the system, the number of cryptocurrency frauds is increasing. Even as platforms work to tighten up their security processes, attackers continue to probe for new openings to exploit.