Ethereum Validator Stole $25M From MEV Bots

Rogue Ethereum validator stole over $25 million worth of cryptocurrencies from an Ethereum MEV bot conducting sandwich trades.

According to PeckShieldAlert, the hacker stole over $25 million from the Ethereum Maximal Extractable Value (MEV) bots and stored the amount in mainly three different addresses. They kept a significant amount in 0x3c98, worth over $20 million. A relatively small chunk worth roughly $2.3 million and $3 million is located in 0x5b04 and 0x27bf, respectively.

As of writing, the hacker has roughly $13.4 million worth of Wrapped Ethereum (WETH), USDT worth $3 million, Wrapped Bitcoin (WBTC) worth $1.8 million, and $1.6 million worth of DAI stablecoin.

Token holdings of the hacker
Image Source: Etherscan

Hacker Became Validator to Steal Funds

The MEV bots use various strategies, one being the sandwich attack. According to Forbes, “MEV bot spots someone else’s intent to buy a coin and sets itself up to profit from the small price appreciation that the other person’s bid will likely cause. The bot jumps the line to purchase the coin at a fraction less, front-running the trade. Then, after the purchase by the mark in the middle goes through, the bot tops off the sandwich by automatically selling the token at a profit.”

CertikAlert explains that as the bots executed the sandwich trade, the rogue Ethereum validator replaced the reverse transaction when they tried to close the trade.

Above all, the hacker became a validator by depositing 32 ETH just 18 days before stealing the funds. Also, they funded the wallet through a privacy tool, Aztec Network. Hence some allege that it is a planned attack.

The community believes it can be a major turning point for the entire MEV ecosystem.

Ethereum validator funded the wallet through Aztec Network.
Image Source: Etherscan

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Source: https://beincrypto.com/eth-validator-attacks-network-takes-25-million/