It was 14th October, when Lawrence Day was relaxing. Suddenly he got news about his company, Indexed Finance’s token transactions. He saw some of the company’s tokens had been sold at a meager price to another person. Later he found out that it wasn’t just one user, but several users sold their tokens at highly discounted prices which were not possible per the market circumstances. Then, Day and Dillon Kellar, co-founder of Indexed, started searching for the code of the platform with which this transaction was made.
And because the Indexed tokens are also built on Ethereum’s blockchain model, Day and Kellar were able to crack the code. But, unfortunately, they found out that there was a breach and they had been subjected to attack. So they made the necessary developments to secure the platform code and prevent such attacks later.
However, now it was time to face the world. Users were asking for refunds, and Day apologized on Twitter for this mishap. Later he found a possible suspect and dug into it deeper. In their search, they found that the attacker was a notable mathematician named Andean Medjedovic, a student at the University of Waterloo in Ontario. He attacked the Indexed tokens by their only possible vulnerability, reindexing. Keller stated that it was an impressive task to find and crack the only possible loophole. However, it was a waste case use of the talent.
The co-founders also contacted the attacker to resolve the issue. However, with no response from his end and denial of returning the funds, both team members decided to file a lawsuit against him on 9th December. The attacker hasn’t responded officially to the lawsuit. However, he claims that all his actions fall under legal jurisdiction. The primary foundation of Indexed is its DeFi structure. However, the same also gave birth to a loophole. So the main factor is determining whether this technology loophole can cause more severe havoc, or is there a concrete solution for it?
