Hedgey Finance, a provider of on-chain token infrastructure, fell victim to two exploits as attackers exploited a flaw in its token claims contract.

Security alerts from Cyvers revealed that Hedgey Finance was compromised on April 19 across both the Ethereum (ETH) and Arbitrutm (ARB) blockchains. Cyvers reported that the initial attack targeted the ETH chain, resulting in the theft of approximately $1.9 million in cryptocurrency.

Analysis of on-chain data indicated that the attacker's address received funding from the web3 crypto exchange ChangeNOW, with the stolen funds subsequently converted into Maker's stablecoin DAI.

Hedgey Finance acknowledged the incident and stated that an investigation was underway. Users were advised to revoke token claim permissions until further notice.

"We are actively collaborating with our auditors and team to comprehend the nature of the attack and prevent any further exploits. Additional information will be shared as our investigation progresses," said the Hedgey Finance team.

The protocol allows individuals to establish an options market for digital assets, enabling the trading of calls and puts on cryptocurrencies issued on EVM-compatible chains. Notably, there is no requirement for listings, and users can immediately engage in peer-to-peer ERC20 options trading.

Shortly after the initial alert, Cyvers issued a subsequent notice revealing a second attack. In this instance, hackers siphoned $42.8 million and transferred a portion of the proceeds to Bybit. The attackers exploited the same vulnerability in Hedgey Finance on both the Ethereum and Arbitrum networks.

The exploitation of Hedgey Finance underscores the importance of allocating additional resources and expertise to safeguarding DeFi platforms, as emphasized by security experts. As cryptocurrency continues to attract mainstream attention, on-chain security is expected to remain a prominent topic for industry veterans and newcomers alike. However, statistics indicate a potential decline in hacking incidents.

Last month, Peckshield reported a 50% decrease in crypto exploits, resulting in smaller losses for investors. Additionally, white hat experts have established a help desk to promptly report hacks and disseminate information on exploit strategies.