GMX Exploiter Return $40M Days After Hack, Token Zooms Higher

The attacker who drained over $40 million from GMX’s V1 contracts earlier this week has started returning funds, suggesting they’ve accepted the project’s $5 million white-hat bounty.

The first signs came Friday via an on-chain message: “ok, funds will be returned later.”

Hours later, over $10.5 million in FRAX was sent back to GMX’s deployer wallet. Security firm PeckShield flagged the returns, which appear to be just the start, with more funds expected to follow.

GMX is now trading at $13.15 having risen by 13% over the past 24 hours.

Later on, over $40 million in various tokens were returned to the GMX Security Committee MultiSig address, Lookonchain noted.

The breach, one of the largest DeFi exploits of the year, targeted GMX’s GLP pool on Arbitrum. It exploited a re-entrancy flaw in the OrderBook contract, allowing the attacker to manipulate short positions on BTC, inflate GLP’s valuation, and redeem it for outsized profits across USDC, WBTC, WETH, and FRAX.

Reentrancy is a common bug that allows exploiters to trick a smart contract by repeatedly calling a protocol to steal assets. A call authorizes the smart contract address to interact with a user’s wallet address.

GMX responded by halting V1 trading and minting across both Arbitrum and Avalanche. A bug bounty worth more than 10% of the stolen funds was offered, with a promise of no legal pursuit if the full amount was returned within 48 hours (which the hacker seems to have adhered to as of European morning hours Friday).