Proposals in crypto help communities make consensus-based decisions. However, for decentralized music platform Auduis, the passing of a malicious governance proposal resulted in the transfer of tokens worth $5.9 million, with the hacker making away with $1 million.
On July 24, a malicious proposal (Proposal #85) requesting the transfer of 18 million Audius’ in-house AUDIO tokens was approved by community voting. First pointed out on Crypto Twitter by @spreekaway, the attacker created the malicious proposal wherein they were “able to call initialize() and set himself as the sole guardian of the governance contract.”
Further investigation from Auduis confirmed the unauthorized transfer of AUDIO tokens from the company’s treasury. Following the revelation, Auduis proactively halted all Audius smart contracts and AUDIO tokens on the Ethereum blockchain.
Blockchain investigator Peckshield narrowed down the fault to Audius’ storage layout inconsistencies.
While the hacker’s governance proposal drained out 18 million tokens worth nearly $6 million from the treasury, it was soon dumped and sold for $1.08 million. While the dumping resulted in maximum slippage, investors recommended an immediate buyback to prevent existing investors from dumping and further lowering the token’s floor price.
Investors are yet to get clarity on the stolen funds as one investor asked, “They hacked the community fund right? The team’s fund is separate correct?”
While a post-mortem report is underway, Audius has not yet responded to Cointelegraph’s request for comment.
Related: Yuga Labs warns of ‘persistent threat group’ targeting NFT holders
Bored Ape Yacht Club (BAYC) creator Yuga Labs issued its second warning about an expected “coordinated attack” on its social media accounts.
In June, Gordon Goner, pseudonymous co-founder of Yuga Labs, issued the first warning of a possible incoming attack on its Twitter social media accounts. Soon after the warning, Twitter officials actively monitored the accounts and fortified their existing security.
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