Euler Finance hacked despite 10 audits in 2 years, says CEO
Press Release

Euler Finance hacked despite 10 audits in 2 years, says CEO

written by John Murphy | March 17, 2023

Is Euler Finance Hacked? yes, It’s true. Euler Finance, decentralized finance (DeFi) platform, was recently hacked despite having undergone ten audits in the last two years, according to the company’s CEO. Euler Finance raised $15 million in funding in its initial coin offering (ICO) last year, and the platform debuted in May.

Euler Finance’s CEO, Joselito Lizarondo, announced the breach on Twitter, warning users not to interact with the platform or its contracts. He later revealed in a Medium post that the hack was related to Euler Finance’s recent deployment of its liquidity pool on Binance Smart Chain.

According to Lizarondo, the hackers were able to exploit a vulnerability in the platform’s smart contract for its liquidity pool, allowing them to steal over $10 million worth of tokens from Euler Finance’s reserves. 

Lizarondo added that Euler Finance had undergone ten audits in the last two years. The CEO explained that the company had two internal audits and eight external ones, including one from Certik, a blockchain security firm. 

Lizarondo explained that despite the numerous audits and the team’s best efforts to ensure security, Euler Finance was still vulnerable, admitting that the group had failed to catch the hack before it happened.

He said that the company was now working on resolving the issue to prevent future attacks from happening.

The Euler Finance CEO also announced that the team had deployed a new smart contract for its liquidity pool on Binance Smart Chain, which had since been audited by multiple firms.

Lizarondo assured users that the new contract was more secure and that the team was working on ensuring the platform was fully operational soon.

Euler Finance’s hack is the latest in a series of DeFi hacks this year, highlighting the growing risks associated with investing and trading on DeFi platforms.

Experts have warned that DeFi platforms while offering open and accessible financial services to everyone, are also ripe for exploitation by hackers due to the lack of central authorities and regulations.

DeFi hacks this year have cost investors hundreds of millions of dollars, with some platforms being hit multiple times.

While many DeFi platforms undergo various audits to ensure security, some have argued that auditing can only be relied upon partially. What platforms should implement extra security measures, such as insurance or rewards systems, for detecting vulnerabilities?

Euler Labs CEO Michael Bentley said he “can never forgive” the hackers for losing time with their newborn son due to this exploit. 

Ten separate audits conducted over two years against Euler Finance, an Ethereum-based lending protocol, rated it as “not low risk” and “not low risk” before being hit with a $196 million. There were no outstanding issues.” 

In a series of tweets on March 17. Euler Labs CEO Michael Bentley described the “toughest days of his life” following Euler’s $196 million flash loan attack on March 13. “I spent a lot of time. 

Blockchain security companies such as Halborn, Solidified, ZK Labs, Certora, Sherlock, and Omnisica conducted smart contract reviews with Euler Finance from May 2021 to September 2022.  

Holborn ranked the risk assessment by measuring the “likelihood of a security incident” and potential impact. Risk levels range from very low and beneficial to severe. Euler assessed it as “only a minor risk.”