Hong Kong-based DeFi protocol Linear Finance reported an attack on Thursday that drained the company’s liquidity Linear USD sign.
“The Linear Finance protocol was subjected to an attack that resulted in the drain of all ℓUSD liquidity on both PancakeSwap and Ascendex, driving the price of ℓUSD to zero,” Linear Finance wrote in a blog post.
“The attacker was able to mint an unlimited supply of ℓAAVE and then trade the liquid asset to ℓUSD on the Linear Exchange, before selling it on PancakeSwap and Ascendex.”
Contracts suspended
After the attack, the protocol paused contracts that allow for the creation, burning or exchange of tokens, disabled the ℓUSD Linear bridge contract, started tracking the attacker and shared the wallets associated with the exploit with major exchanges and authorities.
Linear Finance is trying to rectify the situation and undo the damage to its users, it added.
Linear Finance did not immediately respond to a request for comment from The Block.