NEAR Protocol's Security Challenges Fail to Deter 182% Price Surge

NEAR Protocol's cross-chain swap service, NEAR Intents, thwarted a massive attempt by hackers to launder stolen funds from the cryptocurrency exchange Bitget. On September 29, NEAR Intents blocked more than $50 million in transfers from hackers who had stolen $387.5 million from Bitget on September 24. The SHIELD security system designed to protect NEAR Intents blocked most of the attempts, but approximately $503,000 was frozen mid-swap, and about $166,000 was successfully transferred out.

The hackers redirected their efforts elsewhere, using tools like Zcash's privacy pool to obscure their trail. However, just two days later, on October 1, NEAR Intents faced its own internal security challenge, losing $3.8 million. The vulnerability stemmed from a bug in the smart contract that manages deposits and withdrawals on the cross-chain bridge.

A small error in the smart contract allowed attackers to release tokens that were never deposited. Fortunately, the exploit's impact was contained. Illia Polosukhin, a co-founder of NEAR, stated that the loss was limited to Tether dollar tokens on the BNB Smart Chain. The SHIELD system detected the suspicious activity and paused operations across 11 networks.

NEAR Intents also committed to compensating affected users, and the NEAR blockchain and its main token remained secure. Remarkably, within less than a day, the hacker returned the entire $3.8 million.