The GMX protocol halted trading on GMX V1 after a liquidity pool suffered an exploit on Wednesday, leading to $40 million in funds being stolen and sent to an unknown wallet.
GMX V1 is the first version of the GMX perpetual exchange deployed on the Arbitrum network. The attacked pool is a liquidity provider for the GMX protocol with a basket of underlying digital assets, including Bitcoin (BTC), Ether (ETH) and stablecoins, according to the GMX team.
The protocol has also announced a temporary suspension in minting and redemption of GLP tokens on both Arbitrum and the layer-1 Avalanche network to protect against any additional fallout from the cybersecurity exploit.
Users of the platform were instructed to disable leverage and change their settings to disable GLP minting.
“The exploit does not affect GMX V2, its markets, or liquidity pools, nor the GMX token itself. Based on the available information, the vulnerability is limited to GMX V1 and its GLP pool,” the team said.
Blockchain security company SlowMist attributed the exploit to a design flaw that allowed hackers to manipulate the GLP token price through the calculation of the total assets under management.
Hacks and cybersecurity crimes continue to be major pain points in the crypto industry, affecting both centralized platforms and decentralized exchanges. The hacks have caused billions of dollars in cumulative losses and discouraged new participants from adopting crypto due to the fear of victimization by sophisticated threat actors.
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Crypto hacks continue to be a feature of the digital asset landscape
Losses from crypto hacks reached $2.5 billion in the first half of 2025, with approximately $1.4 billion in stolen funds resulting from the Bybit hack in February.
In June, Iranian crypto exchange Nobitex fell victim to a cyberattack from a pro-Israeli hacker group called Gonjeshke Darande.
The hack caused over $81 million in losses for the Iranian exchange, which forced the temporary pause of services to mitigate the effects of the hack.
The United States Treasury’s Office of Foreign Assets Control (OFAC) announced sanctions on Song Kum Hyok, a group of North Korea state-affiliated hackers, on Wednesday.
Song Kum Hyok infiltrated several crypto companies and defense contracting businesses, intending to exploit these organizations from the inside with both social engineering scams and cybersecurity breaches.
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