DeFi Platform Unizen Faces $2.1 Million Loss in Unauthorized Access Security Breach

Unizen Promises to Compensate Affected Users for $750,000 in Losses From $2.1 Million Security Breach

Unizen promises to refund customers following a $2.1 million loss from a breach on its platform.

By Hassan Shittu | Last updated: March 11, 2024 11:03 EDT | Estimated reading time: 2 min

Decentralized finance (DeFi) protocol Unizen recently experienced a security breach that led to the loss of approximately $2.1 million in user funds. Unizen has swiftly responded to the incident and has pledged to reimburse affected users who lost up to $750,000. This commitment aims to restore confidence in the platform and demonstrates Unizen’s dedication to user protection.

Unauthorized Access and Loss of Funds

On March 9, blockchain analytics firm PeckShield identified an “approve issue” within the Unizen DeFi platform. This issue signaled unauthorized access and resulted in the drainage of over $2 million in funds. Immediate security advisories were issued, urging users to revoke approvals to mitigate further losses. Another blockchain security firm, SlowMist, confirmed that the total losses amounted to approximately $2.1 million, attributing them to an open external call vulnerability.

The hacker exploited an external call vulnerability within the Ethereum-based contract, converting the stolen USDT to DAI. To prevent additional losses, users are advised to revoke any approvals associated with the hacker’s address.

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Unizen’s Response and Investigation

Unizen has acknowledged the security breach and assured users of their commitment to enhancing platform security and preventing future breaches. The company has established a dedicated form to address concerns from affected users. Additionally, Unizen initiated cooperation with law enforcement and forensic experts to identify the perpetrator. In an effort to recover the stolen funds, Unizen sent on-chain messages to the hacker, urging them to return the funds and demonstrating ownership through a transfer from the foundation wallet to the hacker’s Ethereum wallet.

Unizen emphasizes its ongoing collaboration with law enforcement and requests the prompt return of funds to avoid further legal action. As an incentive for cooperation, the company has offered a 20% bounty as a token of appreciation for white-hat efforts.

Unizen’s Reimbursement Plan

To alleviate the impact on affected users, Unizen has taken proactive steps in providing immediate reimbursement. The company announced its intention to reimburse 99% of victims immediately, prioritizing a meticulous, individualized approach to the reimbursement process. Personal loans have been extended by the CEO, Sean Noga, to facilitate the refunds, which commenced on the same day for users who lost less than $750,000.

Refunds will be distributed to users who lost amounts below $750,000, facilitated in either USDT or USD Coin (USDC). For users affected by losses exceeding $750,000, Unizen assures a personalized resolution process. In addition to the reimbursement initiative, the company has released a comprehensive video guide to educate users on reviewing and revoking approvals within the platform, minimizing susceptibility to future vulnerabilities.

Future Outlook and Security Measures

As Unizen prepares to release its post-mortem report, the platform’s engineering team remains focused on restoring normal operations while bolstering security measures to safeguard user assets. The incident report, which has gathered sufficient evidence and engaged third-party firms for assistance, will provide insights into the breach and outline the steps taken to prevent similar incidents in the future.

The Unizen exploit is one among several crypto-related exploits that have occurred in recent times. Unizen’s dedication to improving security measures and protecting user assets highlights the importance of robust cybersecurity in the rapidly evolving blockchain industry.

Q&A

Q: How can users revoke approvals within the Unizen platform?

Users can follow the comprehensive video guide released by Unizen, which provides step-by-step instructions on reviewing and revoking approvals within the platform. This process minimizes vulnerability to future breaches and ensures the safety of user funds.

Q: What other security measures is Unizen implementing to prevent future breaches?

Unizen is committed to enhancing platform security and has invested in collaboration with law enforcement and forensic experts to identify and apprehend the perpetrator. The platform’s engineering team, in conjunction with third-party firms, is conducting a comprehensive post-mortem analysis to gain insights into the breach and implement necessary security upgrades.

Conclusion

Unizen’s prompt response and commitment to reimbursing affected users demonstrate their dedication to user protection and platform security. By taking proactive steps and investing in robust security measures, Unizen aims to restore confidence in its platform and prevent future breaches. As the blockchain industry evolves, ensuring the safety of user funds remains a top priority. Stay tuned for more updates on Unizen’s post-mortem report and the company’s continued efforts to safeguard user assets.

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References:

• Unizen’s Pledge for Reimbursement
• PeckShield’s Identification of the Breach
• Unizen’s Cooperation with Law Enforcement
• Unizen’s Message to the Perpetrator
• Unizen’s Founder’s Loan to Facilitate Refunds
• News on Recent Crypto-related Exploits

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