Mozaic Fi’s Private Key Theft Leads to $2.1 Million Loss; Token Drops by 75%

The post Mozaic Fi’s Private Key Theft Leads to $2.1 Million Loss; Token Drops by 75% appeared first on Coinpedia Fintech News

In the shocking confession, Mozaic FI, a yield aggregator on Arbitrum, announced that about $2 million worth of the crypto it had in its vaults was taken by a malicious hacker. 

In its detailed analysis of the security incident, it was revealed that the hacker was a Mozaic developer who got access to the data of a core team member using a loophole in the security system of the security module and thus obtained its private keys. 

Hackers Tactics

Cyvers Alerts, a Web 3 security firm, flagged the security breach and reported that Mozaic_Fi experienced a hack due to losing access control on the Arbitrum network. The attacker drained around $2.1M from vaults and transferred them to the MEXC exchange. It was assured that once the required procedures are completed, the exchange will return these funds.

ALERTToday, @Mozaic_Fi experienced a hack due to a loss of access control on #Arbitrum. Our system detected multiple unauthorized transactions in real-time!
Attacker has drained around $2.1M from vaults and transferred them to @MEXC_Official
Currently, funds are in custody… pic.twitter.com/erz4DNsnBF

— Cyvers Alerts (@CyversAlerts) March 15, 2024

Mozaic’s Speedy Response

Mozaic carried out a speedy resolution of the exploit upon knowing of the breach as notified by its security counterparts, including Hypernative and others. As the funds were tracked back and forth among exchanges, it was known that 90% of funds were transferred to centralized exchange MEXC and the remaining to Binance, after which the CEX froze them.

Market Impact

On the other hand, there was also an institutional investor that held a vast MOZ position and, seeing the depreciation in the price of the MOZ coin and the decline in TVL, decided to leave the market. The widespread panic sale triggered a downward domino effect of massive selling, bringing the price of $MOZ down massively. 

Peckshield has reported that the token fell more than 75% post the hack and is currently trading at $0.4491 at the time of writing. It was sad to see the price dropping as Mozaic had just recently celebrated its TVL, which had crossed $ 2 million in value.

Conclusion

On a good note, Mozaic FI reassures stakeholders that core components such as the MOZ/xMOZ token, vault contracts and AI remain uncompromised and secure.