Sharwa.Finance Faces Repeated Attacks Exploiting MarginTrading Vulnerability

According to PANews, Sharwa.Finance has reported an attack on its platform, leading to a temporary suspension of operations. Despite this, several suspicious transactions occurred hours later, suggesting attackers exploited the same underlying vulnerability through slightly different methods. The attackers initially created a margin account and used the provided collateral to borrow more assets through leveraged lending. They then executed a 'sandwich attack' on the exchange operations involving the borrowed assets. The root cause appears to be the absence of a bankruptcy check in the swap() function of the MarginTrading contract. This function is responsible for exchanging borrowed assets from one token, such as WBTC, to another, like USDC. It only verifies solvency based on the account status at the start of the exchange, leaving room for manipulation during the process. Attacker 1, identified by the address starting with 0xd356, conducted multiple attacks, profiting approximately $61,000. Attacker 2, with an address starting with 0xaa24, executed a single attack, gaining around $85,000.