AAX Hack

TOTAL LOST $56.0M
High #116 All-Time Other

Summarize with AI

ChatGPT Perplexity Claude Grok
Affected Chain 2022 Incident surface
Recovered - No recovery reported
All-Time Rank #116 By amount stolen
Protocol Type Exit Scam/Other Target category

Incident Overview

Quick Summary

Alleged May Laundering Involving 24,000 ETH Linked To AAH Exchange Amid Operational Suspension

Details of the Exploit

The ongoing investigation into the AAX Exchange unveils potential money laundering activities involving over 24,000 Ethereum (ETH) amidst the exchange's suspension of operations. Blockchain analysts at Cyvers Alerts reported anomalous transactions originating from wallets allegedly associated with AAX, a crypto exchange under scrutiny following FTX's bankruptcy. The transactions, totaling over $55.5 million worth of ETH, purportedly aimed at laundering funds through decentralized exchange (DEX) platforms like UmbraCash and 1inch, with some funds being routed to the TRON blockchain via SwftCoin.

Analysts noted patterns indicative of attempts to circumvent anti-money laundering measures, including blacklisting by Tether Inc. Meanwhile, AAX's operational suspension, announced on November 14, 2022, for data proofreading and restoration, underscores the exchange's challenges. As investigations continue, the focus remains on factual analysis, highlighting key developments without emotional bias.

Stay updated for further insights as the investigation unfolds.

Incident Report

Protocol / Project AAX
Date of Incident
Attack Technique Other
Classification CeFi
Primary Source View Post-Mortem #1 View Post-Mortem #2 View Post-Mortem #3

Protocol Information

Protocol Type Exit Scam/Other
Official Website aax.com
Protocol Twitter/X @aaxexchange?lang=en
Team Anonymous
Source Code Unverified

Market Context at Time of Hack

Token Categories
Ethereum Ecosystem
Protocol Links
Reddit

What the Attacker Needed to Succeed

Understanding the prerequisites for this type of attack helps auditors identify protocols that are most at risk and helps developers build better defenses.

Technical Knowledge Deep understanding of other and Solidity and EVM internals
Capital Required Seed capital to cover gas and initial position setup
On-Chain Access Ability to interact with smart contracts and deploy a custom exploit contract
Protocol Analysis Identification of the exploitable vulnerability in AAX's contract logic - root cause: cefi
Execution Speed Precise transaction ordering and timing to exploit the vulnerability within a single atomic block
Obfuscation Plan A strategy to launder and move stolen funds - typically through mixers, cross-chain bridges, or decentralized DEX swaps to resist tracing

What Auditors Should Check

Could this have been caught in audit? Likely — with a thorough Other audit checklist and test coverage

If you're auditing a protocol with similar architecture to AAX, these are the critical security checks that could have prevented this incident (November 2022).

  • Verify all logic paths related to Other are guarded by proper access controls and input validation
  • Review privileged functions (owner, admin, governance) for potential abuse vectors - centralization risks should be documented and bounded with timelocks or multi-sigs

Master these auditing techniques with hands-on labs and real exploit scenarios in the Smart Contract Hacking course.

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Sources & References

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