Kava Lend loses about $3.8 million in a lending exploit and the KAVA token falls about 40%, as Korean exchanges halt transfers

The Kava network's lending protocol, Kava Lend, was exploited late Friday, and the KAVA token dropped about 40% on Saturday. The Block's onchain analysis found the attacker took about 55.2 million KAVA, worth roughly $3.76 million at the pre-attack price of $0.068.

According to The Block, the attacker targeted a nearly idle BUSD market. By pushing its net supply down to a tiny value, the attacker inflated the credited value of BUSD deposits roughly 243,000-fold within about three minutes, then borrowed KAVA against that collateral 127 times. About 49.2 million KAVA was bridged to BNB Chain through LayerZero and mostly sold for about $2.09 million, The Block reported.

Kava said the incident was isolated to Kava Lend and was not an infinite mint, and paused its Axelar bridge as a precaution, Cryptobriefing reported. South Korea's Upbit suspended KAVA deposits and withdrawals, and Bithumb and Coinone halted transfers. Kava has not published a loss figure, and a full incident report is still to come, The Block said.