ETH wallet exploit backfires as MEV bot captures $7.7M, Kelp freezes address

An attacker exploited a custom module connected to an Ethereum Safe wallet in an attempt to extract roughly $7.7 million in rsETH, only to have the funds intercepted by an MEV bot.

According to blockchain security firm Blockaid, the attacker used a public keeper multicall to direct a custom Uniswap v4 liquidity module into an attacker-created hooked pool, where aEthrsETH was unwrapped into rsETH.

Blockaid identified the affected wallet as a Safe belonging to an unidentified user and said about $7.73 million in rsETH had been lost at the time of its initial report.

Source: Blockaid

The attack was then front-run by an MEV bot known as Yoink, an automated program that monitors blockchain transactions for profitable opportunities. The bot captured the rsETH before the original exploiter could take control of the funds, while Etherscan data shows Yoink transferred about 18.93 ETH, worth roughly $46,000, to an address labeled as a block builder in the same transaction.

Kelp, the protocol behind rsETH, subsequently placed the address that received the funds under a 24-hour pause, temporarily preventing the tokens from being transferred. “This is a precautionary, wallet-level measure only,” Kelp said. “Kelp contracts are safe, rsETH remains fully backed.”

Source: KelpDAO

The protocol said minting, withdrawals and integrations were continuing normally while it worked with security experts to investigate the incident. The apparent attack vector involved the custom module connected to the victim’s Safe, while Kelp said its own contracts were unaffected.

Cointelegraph contacted Blockaid and Kelp for additional comment but had not received a response by publication.

Magazine: Why are AI’s biggest companies suddenly asking to slow down?