Loopscale Restores Some Lending, Says Deposits Took No Losses

Loopscale says it has restored priority lending functions after containing two attack paths, while user deposits suffered no losses and some withdrawal options remain restricted.

Priority lending is available again, and every loan can accept additional collateral. Borrowers may repay all loans except those funded by the USD Coin (USDC) Genesis Vault; borrowers who pay in full can then withdraw their collateral.

Loopscale identified one path in which a pricing configuration error caused collateral deposited in the Solana (SOL) Genesis Vault to be valued as a different asset. The mispricing enabled about $412,000 in borrowing without sufficient collateral.

The second path involved an atomic transaction that sold an unusually high-interest loan to the USDC Genesis Vault, raising the vault’s net asset value and enabling about $521,000 in redemption funds to be withdrawn. Loopscale said its system blocked the operation within 30 seconds after the transaction was generated.

Withdrawals of collateral tied to loans funded by the USDC Genesis Vault remain disabled. Vault withdrawals and other protocol functions are also limited as Loopscale continues security recovery work with partners.