In yet another significant blow to the cryptocurrency ecosystem, blockchain platform Nexera has fallen victim to a major hack. While initial reports suggested that the hack resulted in the theft of over $1.5 million worth of NXRA tokens, the company said that its internal investigation estimated that “only $440k was effectively compromised.”
Nexera, previously known as AllianceBlock, is a Decentralized Finance (DeFi) protocol aiming to bridge DeFi with traditional finance. Responding to the exploit, Nexera has paused the NXRA token contract and halted trading on decentralized exchanges. The company said that efforts were underway to communicate with centralized exchanges to suspend trading activities as well.
What Led to Nexera Crypto Hack
The hack was initially detected by blockchain security firm Cyvers Alert on August 7, 2024. In a post on X (formerly Twitter), CyversAlert said, “Our system has detected a suspicious transaction involving your proxy contract. An address took ownership of your proxy contract and upgraded it. Shortly after, the address used the withdraw admin function to transfer all the $NXRA tokens.”
The attack unfolded rapidly. After gaining control of Nexera’s proxy contract, the unknown entity executed a withdrawal function and transferred a staggering 47 million NXRA tokens to their own wallet. These tokens were then promptly converted into Ethereum (ETH). Subsequently, a portion of the ETH was then transferred to the Binance Smart Chain (BNB Chain).
This methodology, previously carried out by bad actors in crypto hacks earlier this year, is becoming a norm. The involvement of multiple blockchain networks complicates the tracking and recovery of the stolen funds.
Nexera’s Response to Hack
Nexera swiftly responded to the breach by pausing the $NXRA token contract and halting trading on both decentralized and centralized exchanges. The company has also initiated a comprehensive investigation into the incident, aiming to identify the culprits and recover the stolen funds.
In its initial investigation, the company wrote in a post on X that that only $440,000 worth of NXRA tokens were effectively compromised.
“The exploit was part of a wider coordinated attack targeting multiple projects and protocols. Thanks to our team and partners, we managed to identify and stop it quickly and mitigate damage. Of the total $NXRA tokens that were transferred, only $440k was effectively compromised. The remaining $NXRA assets in the attacker’s wallet have been frozen, and they cannot do anything with them,” Nexera said.
“We are also issuing a full post-mortem report in the coming days. Users who have staked on Fundrs will have all their $NXRA restored. For now, nothing needs to be done,” the firm added.
Crypto Hack Fallout
The hack has sent shockwaves through the crypto community, highlighting the persistent vulnerabilities within the blockchain ecosystem. The incident underscores the urgent need for robust security measures to protect digital assets.
For Nexera, the consequences are severe. The plummeting value of the NXRA token, which dropped by 40 percent following the hack, is a testament to the market’s reaction.
The hack of Nexera joins a growing list of high-profile crypto thefts.
The crypto sector faced high-profile losses last month as hackers compromised approximately $266 million through 16 separate breaches. The most noteworthy incidents was the July 18 attack on Indian crypto exchange WazirX, which recorded over $230 million, or 86.4%, of the month’s total losses.
Other significant victims of July’s crypto hacks included algorithmic protocol Compound Finance, which lost $24 million, bridging protocol Li.Fi ($10 million), decentralized AI protocol Bittensor, and liquidity provider Rho Markets, each losing $8 million.
The incident serves as a stark reminder of the risks inherent in the world of DeFi. As the crypto industry continues to grow, it is imperative for projects to prioritize security and invest in robust audit and monitoring systems.
