Ostium, a decentralized trading platform, has confirmed that an attacker stole approximately $23.75 million from its liquidity provider vault last week. The incident, which Ostium described as an attack on its off-chain infrastructure, involved the manipulation of price feeds to generate illicit profits.
The platform, built on the Arbitrum blockchain, uses external data feeds to supply prices for trading traditional and crypto assets. The attacker reportedly submitted fraudulent price reports, which were disguised as legitimate, and then rapidly opened and closed large positions to accumulate artificial gains.
Ostium first alerted its community to a security incident on July 16, announcing that trading had been paused. At that time, the company stated that relevant authorities had been notified and that efforts were underway to track the movement of the stolen funds.
In a subsequent update, Ostium clarified that the attack specifically targeted the off-chain infrastructure responsible for feeding prices into the protocol. The company emphasized that trader collateral, held in a separate smart contract, was not affected. Existing long and short positions also remain open and were not liquidated, though they are currently frozen due to the trading pause.
Blockchain security firm PeckShieldAlert reported that the exploiter converted the stolen USDC into 12,080 Ethereum. Following this, 10,540 Ethereum was deposited into Tornado Cash, a cryptocurrency mixer, in an apparent attempt to obscure the transaction trail.
Trading on the Ostium platform remains paused, five days after the initial incident. Ostium has committed to providing at least 24 hours' notice before resuming operations, at which point existing positions will be marked to the reopening price. The company has also promised to release a post-mortem analysis with technical details in the coming days, as it works to secure the compromised infrastructure and determine a path forward for liquidity providers.
