UK-based crypto startup Euler Labs has faced a cyber-attack where criminals were able to steal around £163 million from its lending platform.

Hackers were able to exploit a vulnerability in the system’s code, which supports a DeFi protocol on Ethereum.

Essentially, the vulnerability allowed users to artificially leverage their assets in both minting and depositing the same transaction, allowing the minting of tokens that exceeded available collateral.

Further, the donation mechanism offered by Euler Finance allows a user to donate the balance of their token, but does not perform a health check on the account.

According to analysis by Elliptic Connect, the crypto assets taken in the attack include USDC ($34.1M), Dai ($8.8M), and we well as Wrapped Bitcoin ($18.9M) and Staked Ether ($137.1M).

The flash loan attack relied on the vulnerability to take out the large uncollatoralised crypto loans, and the money is now currently being laundered via Tornado Cash.

According to Elliptic, the funds that were extracted came from a Monero wallet – the privacy coin does not have a clear public ledger of transactions but could be tracked by the analytics firm.

Euler Finance did say it took immediate action following the attack in an attempt to contain it, and engaged intelligence firms Chainalysis and TRM Labs.

The firm went as far to share information with UK and US law enforcement to alert them to the attack, as well as contacting the attackers, sending the message:

“We understand that you are responsible for this morning’s attack on the Euler platform. We are writing to see whether you would be open to speaking with us about any potential next steps.”

Recommended

• What does Digital Transformation Mean to Incremental CEO, Mark Skelton?
• HSBC to Inject £2 Billion into UK’s Silicon Valley Bank
• Scottish Tech Recruiter Eden Scott Set for Record Turnover

As this story develops, NatWest just announced a limitation on cyrpto payments for its users in a bit to stop the rise in scams and fraud.

While the UK explores potentials for Britcoin, the unregulated industry continues to face an undulating market, fraud, scams, and cyber attacks.