Decentralized finance (DeFi) lending protocol Euler Finance became a victim of a flash loan attack on March 13, resulting in the biggest hack of crypto in 2023 so far. The lending protocol lost nearly $197 million in the attack and impacted more than 11 other DeFi protocols as well.

On March 14, Euler came out with an update on the situation and notified its users that they had disabled the vulnerable Etoken module to block deposits and the vulnerable donation function.

The firm said that they work with various security groups to perform audits of its protocol, and the vulnerable code was reviewed and approved during an outside audit. The vulnerability was not discovered as part of the audit.

Euler has also reached out to leading on-chain analytic and blockchain security firms, such as TRM Labs, Chainalysis and the broader ETH security community, in a bid to help them with the investigation and recover the funds.

Euler notified that they are also trying to contact those responsible for the attack in order to learn more about the issue and possibly negotiate a bounty to recover the stolen funds.

(By PRASHANT JHA)