"Suspicious transactions detected on the Arbitrum network…Evidence suggests about $1.5 million stolen via proxy contract abuse"

Suspicious transactions that appear to have exploited proxy contracts were detected on the Arbitrum network, and evidence indicates about $1.5 million was lost.

On the 5th, blockchain security firm Cyvers Alert said on X (formerly Twitter), "We detected multiple suspicious transactions related to proxy contracts on the Arbitrum network," adding, "The estimated damage so far is about $1.5 million."

According to Cyvers Alert's initial analysis, the operator account that deployed and managed the USDGambit and TLP projects alone appears to have been exposed. The attacker who gained control of this account is believed to have deployed a new contract and changed the administrator privileges (ProxyAdmin) so that they could control it, thereby taking control of existing proxy contracts.

The funds leaked in this process were moved from the Arbitrum network to the Ethereum network and then deposited into Tornado Cash, a privacy mixer used to hide fund flows.

Cyvers Alert said, "This case once again shows how important administrator privilege management is in proxy structures," and added, "Project operators and infrastructure providers need to take extra care to prevent similar security incidents."