Hackers Increasingly Exploiting Flash Loans To Attack DeFi Protocols, New Report Says

DeFi protocol Cheese Bank lost $3.3 million as a result of a November hack which leveraged flash loans, according to a recent post from cybersecurity firm Peckshield.

The Cheese Bank hackers stole the funds via U.S. dollar-pegged stablecoins USD Coin (USDC), Tether (USDT) and Dai (DAI). Value DeFi, Akropolis and Harvest Finance are three DeFi protocols which have been successfully hacked using flash loans.

“In the string of attacks, we have seen malicious actors use flash loans to instantaneously borrow, swap, deposit and again borrow large numbers of tokens so they can artificially manipulate the price of a specific token on a single exchange (e.g., Uniswap, Curve),” Peckshield report authors wrote.

By Emily Mason