An unidentified group of cybercriminals defrauded Euler Finance, a company specializing in cryptocurrency lending, of nearly $200 million. PeckShield, who specializes in detecting irregularities in blockchain asset transfers, was the first to flag the unusually massive transfer of crypto assets on Euler’s crypto exchange platform, which utilizes a capital-efficient permissionless spending protocol. Lenders can make transactions without the presence of a trusted third-party, which the company noted allows users to earn greater interest on their assets while having a better ability to hedge the volatile crypto market. However, this may have assisted the hijackers who used what’s known as a “flash loan attack” to pull off their heist. The attackers were able to manipulate Euler’s smart contracts by targeting a vulnerability in their lending protocol, enabling them to borrow large sums of crypto assets without having to return them. Euler’s specific logic flaw was in their donation and liquidation system where attackers manipulated the conversion rates to earn exaggerated profits when liquidizing their assets. The threat actor’s ETH wallet is being used to track the stolen assets; however, the criminals have reportedly begun washing their stolen funds via Tornado Cash, a sanctioned cryptocurrency mixer. CTIX analysts will continue to monitor this situation and provide additional updates as appropriate.