Incident Overview
On January 8, 2025, Moby Trade suffered a $2.5 million hack on the Arbitrum network due to a compromised private key, which allowed an attacker to upgrade the protocol’s smart contract and execute unauthorized withdrawals. However, white hat hacker Tony Ke exploited a flaw in the attacker's contract and successfully recovered $1.5 million, reducing total losses to $1 million.
The attack stemmed from a leaked private key controlling Moby Trade’s proxy contract, enabling the attacker to modify the smart contract and use the emergencyWithdrawERC20 function to steal USDC, WETH, and WBTC. The attacker swapped the stolen funds into ETH and transferred them to external addresses. However, Tony Ke, an MEV researcher, identified an oversight in the attacker's contract—a missing access control mechanism on the upgrade function.
Using this vulnerability, Ke executed a counter-exploit to retrieve $1.5 million in USDC, which was returned to the protocol. Unfortunately, the remaining $1 million in WETH and WBTC could not be recovered in time. In response, Moby Trade suspended operations and assured users of compensation while investigating the breach.
Incident Report
Protocol Information
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 Moby Trade, these are the critical security checks that could have prevented this incident (January 2025).
- Verify all logic paths related to Access Control are guarded by proper access controls and input validation - see the Access Control 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 TrialFunds Recovery
Recovered
$1.5M
Net Loss
1000000
Security 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
Learn to Prevent the Next Moby Trade
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