Blockchain Game Gamee Faces Smart Contract Attack

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Gamee announces a security breach

On the morning of January 23, 2024 (UTC), the blockchain game backed by Animoca Brands, Gamee, confirmed a smart contract token GMEE on Polygon was compromised through unauthorized access.

Summary:
A few hours ago, there was unauthorized access to the $GMEE token contracts on Polygon leading to the theft of funds. Gamee team has secured all unauthorized access to the token contracts. The exploit affected proprietary team token reserves only, and no community-owned…

— GMEE Token (@GAMEEToken) January 23, 2024

Hackers managed to steal 600 million GMEE tokens, valued at nearly 15 million USD, swiftly converting them into Ethereum (ETH) and Polygon (MATIC).

Web3 security firm Cyvers reported that the attackers bridged some funds to the Ethereum blockchain, and these transactions indicated interactions with the cryptocurrency exchange WhiteBit.

According to the initial investigation, the hackers gained unauthorized access through GitLab.

In the following hours, the attackers swapped the stolen tokens on various DEX platforms, impacting the GMEE transaction prices.

Gamee’s Response Following the Cyberattack

Gamee’s response played a crucial role in containing the aftermath of the cyberattack. The team swiftly secured the token contracts by transferring ownership to a new, secure address, effectively preventing any further unauthorized access. Notably, the breach specifically targeted Gamee’s proprietary team token reserves, while community-owned assets remained unaffected.

The company emphasized its lack of control or custody over community-owned assets.

The incident, which has reverberated through the cryptocurrency community, led to a significant 45% drop in GMEE’s price. Some community members argue that repurchasing tokens to restore the price to pre-incident levels is imperative. They believe that such an action would demonstrate Gamee’s dedication to its community and aid in rebuilding lost trust.

You need to buy back tokens to raise the price back to pre incident levels! If you care about the community you will do this…if not you lose trust forever!

— Allroadsleadto… (@science_jeffrey) January 23, 2024

In response to the crisis, Gamee has taken decisive measures. They temporarily suspended liquidity provisioning on all decentralized exchanges (DEXs) and informed centralized exchanges featuring GMEE markets to temporarily disable deposits and freeze tokens associated with the hack.

Additionally, the team is conducting a comprehensive security review of all existing procedures and contracts. Law enforcement agencies have also been enlisted to initiate legal proceedings against the Gamee hackers.

Impact of the Cyberattack on Gamee’s Price

After the attack, the price of GAMEE dropped by 45% in the past 24 hours but later recovered to around $0.017.

GMEE 4-hour Chart on TradingView at 01:32 on January 24, 2024