Incident Overview
Kronos DAO misappropriated users funds locked into their vaults without informing the investors beforehand. Investors suffered a combined loss of $DAI 6 million.
Kronos Dao was the first decentralized reserve currency protocol on the Klaytn network. The platform offered vaults with investment strategies for specific coins such as the $DAI stablecoin. The team used $DAI 6 million pledged to their vault in order to invest into a Kronos chain based stablecoin called Kairos Cash in the pursuit of higher yields for its investors.
This change in investment strategy was not communicated beforehand and the various transactions to the Binance central exchange made the redirection of investment strategies even less transparent. Cheated investors have filed charges against the Kronos management team.
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 Kronos Dao, these are the critical security checks that could have prevented this incident (May 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
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