Transit Swap

Transit Swap Exploit - October 2, 2022

What Happened

Transit Swap, a cross-chain DEX aggregator protocol, suffered a security breach resulting in $21M in losses. An unknown attacker exploited a vulnerability in the protocol's smart contracts to drain user wallets. However, over 70% of the stolen funds were subsequently returned after the attacker's anonymity was compromised through investigation by multiple security teams.

Technical Root Cause

The vulnerability centered on a flawed implementation of the transferFrom() function. As security researchers noted: *"the claimTokens function calls the transferFrom function of an address, and the address and function parameters are controllable."*

The decompiled code revealed that variables controlling the token address, sender, recipient, and amount parameters in the external transferFrom() call (function signature 0x23b872dd) were not properly validated, allowing arbitrary token transfers from user wallets.

Attack Vector/Exploit Steps

1. Attacker identified users with active token approvals for Transit Swap contracts

2. Invoked vulnerable claimTokens function with manipulated parameters

3. Executed direct token transfers from victim wallets to attacker's address via unvalidated transferFrom() calls

4. Converted stolen tokens to ETH and BNB within ~30 minutes

5. Transferred portion of proceeds to Tornado Cash for obfuscation

First attack transaction (UTC ~18:30): 0xba75ad7a43e784f51fe777d749fc55ae10f1df2bcb01cde97641613b19acb6ec

Attacker address: 0x75f2aba6a44580d7be2c4e42885d4a1917bffd46 (ETH & BSC)

Vulnerable contract: 0xed1afc8c4604958c2f38a3408fa63b32e737c428

Financial Impact

Returned funds consolidated at: 0xD989f7B4320c6e69ceA3d914444c19AB67D3a35E (~$16.5M total)

Remediation

• Protocol paused affected swap contracts immediately

• No remediation details provided in article regarding contract fixes

• Investigation and collaboration between SlowMist, Bitrace, and Peckshield security teams identified attacker's IP, email, and on-chain addresses

• Attacker voluntarily returned majority of funds, likely due to exposure risk

Critical Issue

The protocol used unverified, closed-source smart contracts, preventing transparent security audits and whitehats' ability to identify vulnerabilities preemptively.