Socket protocol loses $3.3M in confirmed approval exploit

An attacker drained funds from users who had previously made infinite approvals to a Socket contract.

Cross-chain protocol Socket has been exploited, and $3.3 million has been drained from contracts associated with it, according to a Jan. 16 social media post from the team. Socket has paused all contracts to prevent further losses.

Urgent

Socket has experienced a security incident which affected wallets with infinite approvals to Socket contracts.

We have identified the issue & have paused the affected contracts.

We’re working on the situation & will keep you informed with regular updates & next steps.

— Socket (@SocketDotTech) January 16, 2024

“Urgent. Socket has experienced a security incident which affected wallets with infinite approvals to Socket contracts,” the post stated. “We have identified the issue & have paused the affected contracts.”

Socket is a cross-chain infrastructure protocol used by many Web3 apps, including Synthetix, Lyra, Kwenta, Superform, Plasma Finance and Level Finance.

Blockchain analyst Spreekaway reported the incident from their X account. According to them, the attacker used a token approval from an Ethereum address ending in 97a5 to carry out the exploit. Spreekaway recommended that users revoke all approvals from this address, which they claim shows up as “Socket: Gateway” on Etherscan. Socket claimed that it paused contracts and that “users don’t need to do ANYTHING.”

Related: Gamma attempts to negotiate with hacker after $3.4M exploit

Phishing scammers appear to be taking advantage of the chaos to get new victims. In a reply to Socket’s official post, a fake Socket account posted a link to a malicious app and urged users to revoke their approvals using another malicious app that was also provided. The fake account contained the misspelled X handle @SocketDctTech instead of the correctly spelled @SocketDocTech. The fake account was removed from X within minutes of the post.

Dune Analytics user Beetle has set up a dashboard to track all losses from the attack.