Platform Loses $40 Billion as Hack Shocks GMX Community

Today’s significant event was the hack of the GMX platform, which resulted in a loss of roughly $40 billion. The attack has been confirmed by the team, and the price of GMX Coin plummeted to $11.5. Initially, the first announcement hinted at the possibility of further price declines, which now appears to have come true. However, leveraged positions remain risky in both directions. Here are the reasons and the latest statements about the situation.

GMX Coin Price Plummet

While it could be seen as an opportunity for short sellers, a $40 million loss for customers has been reported. The team has verified the attack and issued a warning. As GMX Coin’s price drops to $11.5, the daily loss is nearing 25%. No compensation plan has been announced yet, but if implemented, it could spark a rapid liquidation of short positions here.

In case of a bullish reversal, short-term upper wicks could extend to $13 and $13.6. If the decline continues, and a compensation plan is not announced or is unsatisfactory, $9.5 could serve as a dip support. This region was tested during the April crash this year.

Official GMX Response

The team’s announcement briefly acknowledged their awareness of the hack and ongoing investigation.

“The GLP pool on GMX V1 on Arbitrum was attacked. Approximately $40 million worth of tokens were transferred from the GLP pool to an unknown wallet. Security has always been a top priority for GMX, with smart contracts undergoing numerous audits by leading security experts. As a result, all core contributors are investigating how the manipulation occurred and identifying the possible security breach that allowed it in this critical moment.

Our primary focus is to determine the root cause of the issue and resolve it.

Measures taken: Transactions and GLP minting and redemption on GMX V1 have been disabled on Arbitrum and Avalanche . This precaution aims to prevent additional attack vectors and safeguard users from further adverse effects.

Scope of the security breach: This vulnerability does not affect GMX V2, its markets, liquidity pools, or the GMX token itself. According to the current information, the breach is limited to GMX V1 and the GLP pool. A detailed incident report will be published as soon as more complete and verified information is available.”

Details about the attacker’s method were revealed in a warning issued just minutes ago. The following safeguards were recommended for those using GMX forks.

“For all GMX V1 forks, the warning is that ‘GMX V1 has been hacked.’ Disable the leverage feature: This can be done by setting Vault.setIsLeverageEnabled(false) or, if using Vault Timelock, setting Timelock.setShouldToggleIsLeverageEnabled(false).

To prevent GLP minting, use Vault.setTokenConfig or Timelock.setTokenConfig to set all maxUsdgAmounts to ‘1’. Note that the value should not be ‘0’ as ‘0’ means there is no limit.”

For now, the decline appears to have stabilized and assurance that no further losses will occur has contributed to this. GMX Coin’s price is returning to $11.8, and further attempts to rise could occur if a compensation plan is announced promptly.