Prisma Finance $11.6 million exploit leads to asset value plummet, mkUSD stablecoin instability

Ethereum liquid restaking platform Prisma Finance said its vaults were exploited earlier today for an undisclosed sum.

According to the protocol:

“Prisma Protocol has been paused by the emergency multisig and remaining funds are safe. mkUSD and ULTRA, as stablecoins, are overcollateralized and are not at risk.”

CryptoSlate data shows that the mkUSD stablecoin has deviated from its $1 peg and is currently trading at $0.98968 as of press time.

Also, the project’s native PRISMA token fell by more than 25% to as low as $0.24, according to CoinMarketCap data. As of press time, the digital asset’s value has slightly rebounded to $0.3024.

Furthermore, news of the exploit resulted in a 40% decline in the total value of assets locked on the protocol. According to DeFillama data, assets on the platform have fallen to $143 million from the $236 million recorded on March 27.

The hack

Blockchain security firm Beosin reported that the platform suffered a flash loan attack that resulted in the theft of $11.6 million in digital assets.

Initial reports from Cyvers Alert, another blockchain security firm, revealed that the attacker was funded via decentralized exchange FixedFloat and estimated losses at $9 million. However, Prisma Finance’s lethargy in pausing its contract allowed the attacker to siphon an additional $1 million.

As of press time, Prisma has paused its protocol for an investigation. Additionally, the platform advised vault owners to turn off delegate approval on both LST and LRTs as a precautionary measure.

Phishing links

Following Prisma’s disclosure, there has been a noticeable surge in phishing attempts by malicious actors seeking to capitalize on the situation.

One such actor impersonating Prisma falsely claimed that wallets previously connected to the platform could be at risk. So, the phishing attempt urges the protocol users to connect their wallets and utilize a malicious revoke.cash exploit checker for safety assurance.

However, Prisma strongly advised its users to be careful and “trust only official communication channels.” The protocol added:

“During the next hours, be careful with phishing links of all sort.”