Gamma Strategies, an Ethereum-based liquidity management protocol, faces a security breach involving an unauthorized extraction of $3.4 million digital assets. PeckShield, a prominent blockchain security firm, is crucial in assessing and identifying the exploit.

#PeckShieldAlert @GammaStrategies Exploiter-labeled address has transferred 1K $ETH (worth ~$2.2M) to #tornadocash pic.twitter.com/Ins4Fa5cmX

— PeckShieldAlert (@PeckShieldAlert) January 4, 2024

Gamma Strategies Takes Swift Action

Initially estimated at $469,000 in 212 Ether (ETH), subsequent evaluations reveal the total damage is $3.4 million, with $2.2 million traced to Tornado Cash, a cryptocurrency mixer.

In response, Gamma Strategies takes immediate action, suspending all deposit activities to prevent further exploitation while allowing withdrawals. The company communicates directly with the hacker, offering a bounty to return stolen assets.

Gamma Strategies identifies the attack’s root cause, assuring users that disabling public-facing vault deposits effectively mitigates the risk of additional losses. The protocol focuses on remedial measures, including a third-party code review before resuming deposit services to address vulnerabilities. User recovery is prioritized to minimize long-term impact.

The company extends apologies to affected users and commits to releasing a detailed incident analysis and remediation plan, emphasizing transparency and accountability to restore trust within its user base.

In a final update, it’s important to note that while deposits are currently suspended, the ongoing rebalancing and management of positions remain unaffected by the exploit.

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