Security flaw in automated liquidity market-making system enables attackers to drain 58.2 BTC
A sophisticated liquidity manipulation attack has drained 58.2 bitcoin — valued at approximately $7 million — from the Bitcoin-based memecoin launchpad Odin.fun. The incident, which is being linked to China-based hacking groups, exposed a critical vulnerability in the platform’s automated liquidity market-making system.
According to initial findings, the attackers deposited a worthless token—similar to SATOSHI—alongside BTC in Odin’s liquidity pool. By exploiting the platform’s thin market conditions, they were able to set an artificially high price ratio for the token. Once the price was inflated, the hackers withdrew liquidity at the manipulated rate, effectively draining the pool’s BTC reserves.
The attackers’ strategy mirrors tactics seen in other price manipulation exploits, where malicious actors exploit automated market makers (AMMs) to create temporary but profitable price distortions. Industry experts warn that low-liquidity pools on emerging platforms are prime targets for such attacks.
Odin.fun’s co-founder Bob Bodily confirmed that the flaw lay within the liquidity system’s architecture. “Our immediate focus is on cooperating with law enforcement and top exchanges to track the stolen assets,” Bodily stated. He added that the team is conducting a full security audit and has committed to compensating affected users after vulnerabilities are patched.
Blockchain investigators are tracing the stolen funds, which have reportedly been moved through multiple wallets to obscure their trail. Cybersecurity specialists say the complexity of cross-chain BTC tracing may slow recovery efforts, but cooperation with exchanges could lead to partial asset freezes.
This exploit underscores the growing risks in DeFi and memecoin ecosystems, especially for platforms without robust price oracle systems and liquidity safeguards. As one industry expert summarized: “In DeFi, security is not optional—it’s survival.”
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.