December 1, 2023

The Nomad exploit was one of the biggest cryptocurrency hacks in history. As a result, over $190 million worth of funds were depleted. It was called “one of the most chaotic hacks the Web3 has ever seen”.

PeckShield traced the recovery of $9 million in different crypto assets to the cross-chain bridge. According to the company’s findings, the majority of funds were returned in the form of stablecoin USDC followed by USDT and other altcoins.

Nomad appeal for refund

The exploit arose due to a flaw in the smart contract. This led to hundreds of users, with no technical knowledge, finding a transaction that worked, modifying the target address with their own, and retransmitting it. Basically, copying and pasting the steps the original hacker took. The nature of the event led to Terra’s unnamed investigator, FatMan consider the attack as “the first decentralized robbery.”

The team later confirmed that some fundraisers were, in fact, trying to help the project by preventing the crypto from falling into the wrong hands. Nomad then urged white hat hackers and ethical researchers to return the tokens.

The blockchain security company, PeckShield, famous that almost 3.78 million USDC, 2 million USDT, 15.8 million CQT (approx. $1.38 million), $1.28 million FRAX (approx. $1.2 million), 100 ETH (approx. $164k), 200 WETH (approx. $328K) recovered. Over 50% of the stolen funds are still located in 3 main addresses.

Nomad announced that it received $22.4 million in seed funding from industry giants Coinbase Ventures, OpenSea, CryptoCom Capital, Polygon, Gnosis, Polygon, etc., just days before the security breach. The team is right now employee with a leading intelligence company, TRM Labs, as well as law enforcement authorities to trace the stolen funds and identify the recipients’ wallets.

Major Red Flag is missing

As investigations continue, reports of an error on Nomad’s part have surfaced. According to crypto analysis team BestBrokers, the vulnerability exploited by the attackers allegedly is emphasized in a security audit report made by Quantstamp on June 6, 2022.

He was reportedly considered “low risk”. The Nomad team in fact he responded saying – “We find it virtually impossible to find the blank leaf preview”.

Hidden potato has contacted Nomad about the development and will update the story accordingly.

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