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The most notable flash loan attack on the BNB Chain occurred on Oct. 11, when an MEV bot achieved a substantial arbitrage gain of $1.575 million.
This attack, which traversed the Pancakeswap DEX network, incurred a mere fee of $4.16 for the executing bot, resulting in significant profits.
Major Single Flash Loan Attack on BNB Chain
According to reports, the MEV Bot with the address 0x216Ccf on the BNB Chain has set the record for the largest single arbitrage profit in the history of the chain.
EigenPhi, a prominent blockchain data analytics firm, disclosed the specifics, confirming that the substantial profit stemmed from a meticulously orchestrated price manipulation attack on the BH token.
In essence, the attacker took advantage of a vulnerability in the system for approximately $1.27 million, promptly transferring the funds to the well-known mixer Tornado Cash.
This individual borrowed a significant amount of USDT using the function ID 0x33688938 and contributed USDT to the contract.
Under typical circumstances, the liquidity ratios for the contract are around 1 USDT:100 BH. The attacker then manipulated the system by swiftly exchanging USDT for BH via the pair and subsequently withdrew the liquidity with the transaction ID 0x4e290832.
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This swap drastically altered the liquidity removal ratio, shifting to roughly 1 USDT:2 BH, enabling them to withdraw an even greater amount of USDT.
The sequence of transactions was later validated by Beosin, a well-regarded blockchain security firm, highlighting its intentional nature. The attacker realized a total profit of $1.575 million throughout the process.
The MEV Bot address 0x216Ccf was likely established on Oct. 6 and has remained inactive since that date, leading up to the flash loan attack. The counter address, 0xFDbfcE, has been active and currently possesses about 1,000 BNB tokens valued at $205.8K.
The Flash Loan Attack Dilemma
Flash loan attackers primarily exploit the flash loan mechanism to misappropriate users’ funds, as seen in the case of BH tokens. In its fundamental sense, a flash loan is not an attack but a system that enables individuals to capitalize on arbitrage trading.
In the 24 hours prior to the writing of this report, EigenPhi’s data indicates that there were approximately 278 flash loans executed within the Ethereum network. The figures have been 2,435 and 9,721 over the past 7 and 30 days, respectively. Over $2.2 billion in transaction value has been attributed to flash loans in the last 30 days, indicating the widespread utilization of this mechanism.
Nonetheless, numerous fraudsters have been utilizing flash loans to undermine cryptosystems and defraud investors, as illustrated in the aforementioned case. In June of this year, a DeFi protocol named Sturdy Finance lost 442 ETH valued at $800K through various hacks, including a flash loan attack.
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