Alex Protocol Attack: Hacker Distributes Stolen STX via 9,700 Transactions

Alex protocol, a Bitcoin layer two (L2) network bridge that leverages the Stacks (STX) chain to enhance BTC-native DeFi applications, has issued an update on its recent attack. According to an X post earlier today, the Alex protocol attacker had created more than 4,700 unique addresses, up from only 100 in the last seven days.

As a result, the Alex protocol attacker broadcasted over 9,700 traceable transactions to distribute the stolen STX tokens.

The company indicated that the attacker’s current traceable STX deposits into centralized exchanges (CEXs) are 8,373,587 STX. On the other hand, the attacker’s on-chain balance was around 5,560,332 STX tokens, which is calculated based on wallet balances above 100 STX units

ALEX Security Update

As of June 17th at 11AM, the attacker has broadcast more than 9700+ transactions, which involve generating new wallets addresses then dispersing the on-chain STX balance across those new wallets.

The number of traceable transaction started to grow… pic.twitter.com/BZ3TPevqor

— ᛤ ALEX 🟧 THE Finance Layer on Bitcoin ᛤᛤᛤ (@ALEXLabBTC) June 17, 2024

Closer Look at Alex Protocol Attack

According to on-chain data analysis conducted by the Certik platform, Alex Lab was compromised through its private keys in a smart contract upgrade. The attacker is believed to have used the same techniques as the Ronin bridge hacker, who was responsible for a loss of more than $600 million in digital assets.

Based on the recent information, the Alex Lab attacker is confident of a successful strike rate. Furthermore, the Alex Labs team previously offered the attacker a 10 percent bounty reward, which the hacker disregarded despite reports of an identity breach.

Market Implications

Following the Alex Labs attack, Stacks (STX) value has declined over 16 percent in the past week to trade at about $1.82 on Monday. Although the Alex Labs team indicated that the majority of the CEXs have frozen the stolen funds, the attacker has managed to liquidate a portion, thus weighing heavily on the underlying assets amid a crypto bearish outlook.

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