The newly launched XEN Crypto is down 39% in the last 24 hours after a user found a way to mint over 100 million tokens on FTX without paying any gas fees.
Exploit mints over 100 million tokens
According to a report from X-explore, the attacker exploited FTX by deploying an attack contract on-chain and sending a small amount of ETH to the contract from FTX.
Each transaction created 1 to 3 sub-contracts that performed a MINT or CLAIM XEN function before self-destructing. The FTX hot wallet paid for all these transactions.
The report stated that FTX had lost over 81 ETH to the gas theft while the exploiter had minted more than 100 million XEN tokens. The exploiter is already cashing out as he has swapped the XEN tokens for 61 ETH using decentralized exchanges like Uniswap and Dodo.
Since FTX allows free withdrawals, the attacker is not incurring any cost for the exploit. There’s also no limit transfer gas, meaning the attack could continue for days.
XEN is facing a Sybil attack
X-explore also revealed that XEN crypto was facing a severe Sybil attack.
According to the report, 67,685 Sybil attack addresses(80%) interacted with the platform on Oct. 12. Since the token’s launch, 335,000 Sybil addresses accounted for 45% of the total participating addresses.
Binance Academy defined a Sybil attack as “a kind of security threat on an online system where one person tries to take over the network by creating multiple accounts, nodes or computers.”
XEN still guzzling gas fees
Despite an exploiter being able to mint millions of tokens without paying gas fees, XEN crypto remains the top Ethereum gas guzzler. According to Etherscan data, the project accounted for roughly 15% of the gas fees paid in the last 24 hours.
XEN had drawn interest from the wider crypto community thanks to its novel approach to the industry. The significantly increased activity on Ethereum, sending gas fees up and making ETH deflationary for several days.
Meanwhile, XEN crypto’s trading volume has surged by 10%, but its value has crashed. The token is trading for $0.00009215 on CoinMarketCap. Data shows it is trading 98% away from its peak value of $3.67.