Pike, a decentralized finance (DeFi) platform, has issued an explanation regarding its previous assertion concerning a vulnerability discovered in USDC Coin (USDC). This clarification follows a $1.6 million breach that occurred on April 30.

On May 1, Pike released a statement indicating that the breach was linked to a weakness in USDC and emphasized that the security lapse experienced by the network was not attributable to any shortcomings in USDC's product offerings.

“This breach is connected to the initial USDC vulnerability that was reported last week on the 26th of April.”

However, Pike swiftly retracted this statement, acknowledging that the terminology used did not accurately describe the nature of the breach.

Pike underscored that the breach resulted from deficiencies in its security protocols within its contract functions while executing transfers using the Cross-Chain Transfer Protocol (CCTP), a service provided by Circle, the issuer of USDC.

Pike clarified that the fundamental cause of the breach was unrelated to the functionality of Circle’s product offerings.

In an earlier announcement, Pike disclosed that its auditing partner had identified the vulnerability responsible for the initial hack on April 26, but their team was unable to address it promptly. They stated:

“It is important to clarify that this vulnerability was previously identified by our auditing partner, OtterSec. Our developer team was unable to address the identified vulnerability in a timely manner.”

Pike acknowledged that the breach stemmed from their team's "inadequate integration" of third-party technologies such as the CCTP or Gelato Network’s automation services.

On April 30, an attacker exploited a vulnerability in the protocol's smart contract, siphoning approximately $1.68 million across Ethereum, Arbitrum, and Optimism. The attacker obtained $1.4 million in Ether (ETH), $150,000 in Optimism (OP), and around $100,000 in Arbitrum (ARB) tokens.

Pike recognized that both breaches were attributable to the same smart contract vulnerability. The protocol explained that the misalignment within the contract ultimately enabled the attackers to circumvent administrative access and withdraw funds.

Despite ongoing security challenges in the crypto space, data indicates a significant decrease in losses resulting from crypto-related breaches in April compared to February and March.

On May 1, PeckShield reported that losses from breaches in April decreased to $60 million, a substantial reduction from February's $360.8 million and March's $187.6 million.