Incident Overview
Citadel Finance suffers flash loan attack, losing about $97,000 USD worth of 43.34 ETH on Arbitrum chain.
On January 27th, 2024, Citadel Finance, a Treasury-Backed Protocol on the Arbitrum chain, was exploited through a flash loan attack. The attacker manipulated the price of underlying assets, specifically the WETH/USDC pair on the Camelot Router. By taking a flash loan of approximately 4500 WETH and depositing it with the Camelot LP, the attacker was able to manipulate the WETH/USDC.E pool pair.
They then called the redeem function from the CITRedeem contract to get huge amounts of WETH from the treasury with a low amount of CIT. Approximately 30.95 CIT tokens were burned, and the attacker took away assets worth 21.326 WETH. The flash loan was repaid, and the attacker was able to retain the excess funds as profit.
The attacker used this scheme a couple times. The stolen funds were transferred to another EOA and then deposited into Fixed Float, resulting in a total loss of $97,000 USD worth 43.34 ETH.
Attacker address:
https://arbiscan.io/address/0xfCf88e5E…3F8b49
Malicious transactions:
https://arbiscan.io/tx/0xf52a681b…006855
https://arbiscan.io/tx/0x89eafbcd…3349a2
Malicious contract:
https://arbiscan.io/address/0xfCBf4112…9eA5A6
Fixed Float Deposit transactions:
https://arbiscan.io/tx/0x36bc4c82…585725
https://arbiscan.io/tx/0x62a0012a…bf1176
https://arbiscan.io/tx/0xbc9811fb…f3c145
Incident Report
Protocol Information
Market Context at Time of Hack
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.
What Auditors Should Check
If you're auditing a protocol with similar architecture to Citadel Finance, these are the critical security checks that could have prevented this incident (January 2024).
- Verify all logic paths related to Flash Loan Attack are guarded by proper access controls and input validation - see the Flash Loans Attacks attack class for patterns
- 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.
Free TrialSecurity Audit History
- Audit Report 1 Report
Related Attack Classes
The technique used in this hack maps to these vulnerability classes in our security curriculum:
Sources & References
- 01
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02
Web Archive https://archive.is/dKFw5
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