BlockSec prevents $5 million from being stolen on Paraspace

Quick Take

  • Security firm BlockSec prevented a hacker from stealing $5 million from the NFT lending project Paraspace.
  • After the hacker was unable to execute the attack due to low gas fees, BlockSec carried out the attack as a white hat and took control of assets.
  • The firm said it has notified Paraspace regarding their return.

BlockSec, a smart contract audit firm, prevented a hacker from stealing 2,900 ether ($5 million) from the NFT lending project Paraspace amid a major vulnerability, it said.

BlockSec detected a hack in real time and rescued the funds, it said.

After the perpetrator was unable to execute the attack amid low gas fees, BlockSec carried out the attack as a white hat and took control of 2,900 ether ($5 million) worth of assets from Paraspace. The firm said it has notified Paraspace regarding their return.

“We monitored and observed the failed transaction. Meanwhile, we re-deployed the [hacker's] contract with some upgrades to do the rescue,” Matthew Jiang, director of security services at BlockSec told The Block.

Paraspace said in a Twitter post it had paused its lending protocol and was investigating the issue. It added that NFT assets deposited to the platform were safe.

BlockSec thwarts theft using its real-time monitoring system

The vulnerability in Paraspace’s lending contracts could have allowed the attacker to borrow crypto tokens with less NFT collateral than needed, which may have then allowed the hacker to drain its liquidity.  “On Paraspace, the loan collateral's balance could be manipulated by the attacker,” Jiang further noted.

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