Radiant Capital, a cross-chain lending protocol, has fallen victim to a major cyberattack resulting in over $50 million in stolen user funds. This incident highlights the potential weaknesses in multisignature wallets (multisigs), a commonly used security mechanism in the Web3 space.
According to security experts and Radiant Capital itself, attackers exploited vulnerabilities in the protocol’s smart contracts on the Binance Chain (BSC) and Arbitrum blockchain. The exploit leveraged the “transferFrom” function, allowing attackers to drain user funds across various cryptocurrencies like USDC, WBNB, and ETH. Estimates suggest the total loss could be as high as $58 million.
Radiant Capital confirmed the attack and is collaborating with security firms like SEAL911, Hypernative, ZeroShadow, and Chainalysis to investigate and recover funds. The lending markets on BSC and Arbitrum have been paused until further notice, while operations on Base and Mainnet remain unaffected.
Investigation suggests the attackers gained control of several private keys belonging to signers in Radiant Capital’s multisig wallet. This compromised access allowed them to manipulate smart contracts and steal user funds. The incident underscores the potential vulnerabilities of multisigs, which are often seen as a secure way to manage cryptocurrency wallets.
The dominance of multisigs in Web3 security creates a single point of failure, making them susceptible to targeted attacks. Security experts like Sreeram Kannan, founder of EigenLayer, emphasize the need for more decentralized security solutions. He argues that reliance on multisigs undermines the core principles of trust and decentralization inherent in blockchain technology.
This incident serves as a wake-up call for the Web3 industry to explore alternative security solutions that offer a more robust and decentralized approach to protecting user funds.
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Author: Sb
