Major Hack at ALEX Lab Drains $4.3 Million

In a severe security breach, the Bitcoin DeFi application ALEX Lab was compromised, resulting in the loss of over $4.3 million in various tokens. This incident occurred early Wednesday and is believed to be due to a private key compromise that targeted its bridging service, XLink.

Security firm CertiK, which analyzed the breach, suggests that the attackers likely obtained access to a private key that controlled the XLink bridge. This bridge is critical as it facilitates the transfer of tokens between different blockchains. Utilizing this access, the hacker managed to siphon off more than $300,000 in bitcoin (BTC), $3.3 million in various stablecoins, and $75,000 in Sugar Kingdom (SKO) tokens.

Following the breach, ALEX developers promptly acknowledged the hack through a post on the social platform X during the early hours in Europe. They claimed to have identified the individual responsible for the attack. In an attempt to mitigate the damage, the ALEX Lab Foundation has extended a bounty offer to the attacker, proposing a 10% reward for the return of 90% of the stolen funds.

The statement from the developers read, “ALEX Lab Foundation has identified the individual responsible for the recent security breach and is offering a resolution through a bounty arrangement. ALEX assures that upon compliance, there will be no further pursuit or law enforcement involvement. This offer stands until May 18 at 0800 UTC.”

To prevent further misuse of the stolen funds, major cryptocurrency exchanges have frozen the funds associated with the hacker’s accounts. This action is part of a broader strategy to secure the assets and deter additional attempts to move the stolen funds.

Private key compromises are a significant threat in the cryptocurrency space, often leading to substantial financial losses. Notable incidents include the $650 million drain from Ronin in 2022 and the $100 million hack of Harmony in the same year. These events underscore the critical need for robust private key security measures within the crypto industry.

The hack at ALEX Lab serves as a stark reminder of the vulnerabilities associated with digital asset security. As the DeFi sector continues to evolve, the importance of enhanced security protocols and vigilant protection of private keys becomes increasingly apparent. The community and developers alike must prioritize these aspects to safeguard assets against such sophisticated threats.