Stablecoin ℓUSD fell to zero after DeFi project Linear was hacked

Hong Kong-based DeFi project Linear Finance reported an attack that resulted in the loss of all liquidity in the stablecoin ℓUSD on the PancakeSwap and Ascendex platforms.

The price of the coin fell to zero. The amount of damage is unknown.

NEWS: @LinearFinance has reported an attack that resulted in the draining of all $LUSD liquidity on both PancakeSwap and Ascendex.

As a result, the price of $LUSD has fallen to zero.

🔻 https://t.co/pjWVaoUEaf pic.twitter.com/lx1GYlyacp

— CoinGecko (@coingecko) September 22, 2023

“The attacker was able to create an unlimited amount of ℓAAVE and subsequently exchange the liquid asset for ℓUSD through Linear Exchange and then sell it on PancakeSwap and Ascendex,” the statement said.

The Linear team has taken a number of actions to protect the protocol and user funds:

• suspended all smart contracts that allow the issuance, exchange and burning of tokens;
• disabled the bridge for ℓUSD;
• hired third-party specialists to track hackers and bring them to justice;
• provided data on the wallets involved in the exploit to major exchanges and law enforcement agencies.

The developers promised to reveal the details of the incident later and asked not to trade ℓUSD during the investigation.

🗣️Urgent Update Re $LUSD 📢

The Linear stable coin $LUSD appears to be under an exploit attack. While the team investigates, DO NOT BUY LUSD, DO NOT TRADE $LUSD

Liquidations are paused and users accounts are not at risk.

Further updates will follow.

— Linear Finance (@LinearFinance) September 21, 2023

According to CoinGecko, over the past 24 hours, stablecoin trading volume amounted to about $3 million. About $2 million of this figure occurred in the period after the exploit.

“Restoring the protocol and addressing user harm will be our top priority until the issue is fully resolved,” the team stressed.

Let us remind you that on the eve of the DeFi protocol Balancer reported a hack frontend. Damage is believed to be approximately $238,000.

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