In a positive development for the crypto community, the individual responsible for the GMX exploit accepted the platform\u2019s bounty and returned over $40 million worth of assets stolen from the project.<\/p>\n
On Friday, the recent GMX V1 exploit ended on a happy note after the individual responsible for the incident turned into a white-hat hacker. Perpetual and spot crypto exchange GMX lost over $40 million on Wednesday when an attacker exploited a vulnerability in the protocol\u2019s first version on Arbitrum.<\/p>\n
According to online reports, GMX V1\u2019s vault contract had a vulnerability that allowed the attacker to manipulate the GLP token price<\/a> through the system\u2019s calculations.<\/p>\n Blockchain security firm SlowMist explained<\/a> that \u201cThe root cause of this attack stems from GMX v1\u2019s design flaw, where short position operations immediately update the global short average prices (globalShortAveragePrices), which directly impacts the calculation of Assets Under Management (AUM), thereby allowing manipulation of GLP token pricing.\u201d<\/p>\n Through a reentrancy attack, they successfully established massive short positions to manipulate the global average prices, artificially inflating GLP prices within a single transaction and profiting through redemption operations.<\/p>\n As a result, approximately $42 million worth of assets, including Legacy Frax Dollar (FRAX), wrapped bitcoin (WBTC), wrapped ETH (WETH), and other tokens<\/a>, were transferred from the GLP pool to an unknown wallet.<\/p>\n The perpetual crypto exchange halted<\/a> GMX V1\u2019s trading and GLP\u2019s minting and redeeming on both Arbitrum and Avalanche to prevent another attack and protect users\u2019 funds. However, they clarified that the exploit was limited to GMX\u2019s V1 and its GLP pool. GMX V2, its markets, or liquidity pools, and the GMX token were not affected and remained safe.<\/p>\n Following the incident, GMX sent a message on-chain and on X offering<\/a> a $5 million white-hat bounty to the attacker, claiming that their abilities were \u201cevident to anyone looking into the exploit transactions.\u201d<\/p>\n GMX\u2019s team noted that returning the funds within the next 48 hours and accepting the bounty would allow the hacker to \u201cspend the funds freely,\u201d instead of taking additional risks to access them. They also vowed not to pursue any legal action and to assist the exploiter<\/a> in providing proof of source for the funds if it is ever required.<\/p>\n Today, the exploiter responded in an on-chain message, accepting the bounty and starting the return process. As Lookonchain reported, they initially returned $10.49 million worth of FRAX on Friday morning.<\/p>\n Meanwhile, another $32 million worth of assets had been swapped into 11,700 ETH, which are now valued at $35 million after the King of Altcoins\u2019 price jumped to the $2,990 mark.<\/p>\n In the following hours, the hacker returned 10,000 ETH, worth $30 million, keeping only 1,700 ETH, valued at $5.2 million, as the bounty.<\/p>\nWhite-Hat Claims $5 Million Bounty<\/h2>\n