Bancor Hack

The Bancor hack was primarily a wallet security breach rather than an exploitation of smart contract code vulnerabilities. However, the key technical aspects involved:

1. The attackers gained access to a wallet that had privileges to execute functions on Bancor's smart contracts
2. This wallet had authorization to call critical functions, including withdrawal and token issuance
3. Once the wallet was compromised, the attackers could directly drain funds from Bancor's contracts

The situation was made possible by privileged functions in the contract:

// Simplified representation of the vulnerable setup
contract BancorToken is ERC20, Ownable {
    bool public transfersEnabled = true;
    
    // The backdoor that allowed Bancor to freeze tokens
    function disableTokenTransfers(bool _disable) public onlyOwner {
        transfersEnabled = !_disable;
    }
    
    // Transfer function with centralized control
    function transfer(address _to, uint256 _value) public returns (bool) {
        require(transfersEnabled, "Transfers disabled");
        // Standard ERC20 transfer logic
        // ... code omitted for brevity
    }
    
    // The function that allowed the attacker to withdraw funds
    function withdrawTokens(address _token, uint256 _amount) public onlyOwner {
        ERC20(_token).transfer(owner, _amount);
    }
}

The critical security issues were:

1. A single wallet had extensive privileges over the protocol's smart contracts
2. This administrative wallet was not secured using a multi-signature scheme
3. The contract included functions that allowed direct withdrawal of user funds
4. The same privileged functions that enabled the theft also enabled Bancor to freeze the stolen BNT