On April 14, 2025, KiloEx, a decentralized exchange (DEX), experienced a devastating hack. This episode resulted in a mind-boggling $7.5 million loss from its Vault tool. Because the exploit manipulated prices on ETH/USD pairs for a range of cryptocurrencies, the price of KiloEx’s native token, KILO, plummeted. In response, KiloEx has initiated recovery efforts, collaborating with blockchain security partners and offering a bounty program to recover the stolen assets.
Attack Details and Exploitation
Under a dreary sky in the early hours of April 14, 2025, the KiloEx Vault hack was set to start. Web3 security company Cyvers Alerts first tracked the signs of an attack across several blockchains including BNB Smart Chain, Base and Taiko. The attacker exploited a critical vulnerability in KiloEx’s oracle mechanism. They did this using a wallet funded via Tornado Cash to spoof ETH/USD prices below market value.
The hacker used a fabricated ETH/USD price of only $100. They then closed the position at a highly inflated price of $10,000, reaping in a jaw-dropping $3.12 million profit in a single transaction. PeckShield on the other hand puts total losses at $7.5 million. They claim that $3.3 million was drained from Base, $3.1 million from opBNB, and $1 million from BNB Smart Chain. KiloEx was quick to react to the attack, assuring that its Vault tool was hacked through the wallet address 0x00fac92881556a90fdb19eae9f23640b95b4bcbd.
The research team disclosed that the hacker used cross-chain tools such as zkBridge and Meson to move the stolen assets. This made it much more difficult for states to attempt to freeze the funds. KiloEx has partnered with BNB Chain, Manta Network and leading security agencies including Seal-911, SlowMist and Sherlock. Collectively, they’re tracking down each stolen dollar and proactively taking steps to limit the fallout.
Market Impact and Token Performance
KiloEx’s KILO token started its first day of trading at a record high price of $0.153 on 27th Mar 2025. The protocol suffered an astonishing crash of 31.9% within 24 hours after the hack, dropping to $0.035. The decline halved the token’s market capitalization from $11 million down to $7.5 million. Consequently, it dropped by almost 78% of its value since it was launched.
The devaluation of KILO shows how quickly investor confidence was lost right after the security incident took place. This attack demonstrates just how vulnerable smaller cryptocurrencies are to such exploits and the disastrous financial impact they can have.
The KiloEx hack was a heartbreaking attack on the crypto community, especially to the platform’s dedicated community and investors. This situation serves as an important reminder of the dangers associated with decentralized finance. Comparatively, the administration’s cybersecurity strategy draws particular attention to national security.
Broader Implications for DeFi Security
The KiloEx Vault hack follows an almost identical hack at Hyperliquid a few days prior. In addition, in March 2025, one whale leveraged liquidation to score a jaw-dropping $6.2 million profit. The second example, the Hyperliquid incident, involved a whale taking advantage of the highly volatile JELLY token. This event illustrated just how quickly oracles can be gamed to alter asset valuations.
Together, both events illuminate an emerging alarm within the DeFi community. They’re particularly concerned about the security of vault mechanisms and oracle pricing on decentralized exchanges (DEXs). These examples make clear the dire necessity of robust security measures. To truly stop and catch criminals trying to cheat the system, we need to create robust real-time monitoring systems.
As seen in recent months, these vulnerabilities pose extensive ramifications, eroding confidence in the DeFi ecosystem and threatening to stifle its expansion. In DeFi’s race to turbocharge innovation, the community should focus on security to promote the longevity and sustainability of secure decentralized financial systems.
