Cross-chain protocol Socket has been exploited, and $3.3 million has been drained from contracts associated with it, according to a Jan. 16 social media post from the team. The team has paused all contracts to prevent further losses.

Urgent

Socket has experienced a security incident which affected wallets with infinite approvals to Socket contracts.

We have identified the issue have paused the affected contracts.

We’re working on the situation will keep you informed with regular updates next steps.

— Socket (@SocketDotTech) January 16, 2024

“Urgent Socket has experienced a security incident which affected wallets with infinite approvals to Socket contracts” the post stated. “We have identified the issue have paused the affected contracts.”

Socket is a cross-chain infrastructure protocol used by many Web3 apps, including Synthetix, Lyra, Kwenta, Superform, Plasma Finance, and Level Finance. Socket claims that more than $3.3 million has been lost in the attack. The team has paused contracts, preventing the attacker from draining more funds.

Blockchain analyst Spreekaway reported the incident from their X account. According to them, the attacker used a token approval from Ethereum address 0x3a23f943181408eac424116af7b7790c94cb97a5 to carry out the exploit. Spreekaway recommended that users revoke all approvals from this address, which they claim shows up as “Socket: Gateway” on Etherscan. Socket developers claimed that they have paused contracts and “Users don't need to do ANYTHING.”

Related: Gamma attempts to negotiate with hacker after $3.4M exploit

Phishing scammers appear to be taking advantage of the chaos to get new victims. In a reply to Socket’s official post, a fake Socket account posted a link to a malicious app and urged users to revoke their approvals using another malicious app that was also provided. The fake account contained the misspelled X handle @SocketDctTech instead of the correctly spelled @SocketDocTech. The fake account was removed from X within minutes of the post.

Socket protocol loses $3.3M in confirmed approval exploit image 0 Phishing account on X claiming to be Socket. Source: X

Dune analytics user beetle has set up a dashboard to track all losses from the attack.