DeFi Protocol USPD Bleeds $1 Million in Sophisticated "CPIMP" Exploit

Another day, another DeFi protocol learns a million-dollar lesson the hard way.

The Attack Vector: Not Your Average Hack

The exploit, dubbed "CPIMP," didn't rely on brute force. It bypassed standard security layers by manipulating a seemingly minor protocol function—a classic case of a smart contract's logic turning against its creators. The attack siphoned funds with surgical precision, leaving the protocol's core infrastructure intact but its treasury significantly lighter.

The Aftermath: Counting the Cost

The total damage rings in at a cool seven figures. That's a million dollars of user funds evaporated, a stark reminder that in the high-stakes casino of decentralized finance, the house doesn't always win. It's the kind of event that makes traditional finance guys smirk into their triple-shot lattes—"See? We have FDIC insurance."

A Bullish Silver Lining?

Paradoxically, these stress tests, while painful, are forging a more resilient ecosystem. Each major exploit forces a sector-wide audit of similar code, patching vulnerabilities across the board. The fire refines the metal. The industry's response—its speed, transparency, and collaborative fixes—proves DeFi's antifragile core is stronger than any single point of failure.

The takeaway isn't to flee DeFi, but to back the builders who survive the storm. The protocols that endure these attacks emerge tougher, smarter, and more valuable. After all, in the race to rebuild global finance, a few battle scars are just proof you're in the fight.

A decentralized finance platform called USPD has fallen victim to a complex security breach that resulted in approximately $1 million being stolen from its protocol. What first looked like a normal system setup months ago was actually a hidden trap waiting to strike. 

In the meantime, USPD is offering a 10% bounty if the attacker returns 90% of the stolen funds.

How the USPD Attack Happened?

According to blockchain security firm PeckShieldAlert, the attacker planted the trap all the way back on September 16, while the project was still being deployed. They used a clever technique during the proxy setup phase, gaining admin rights before USPD’s own deployment script could finish.

Meanwhile, this type of exploit is now being called a “CPIMP” attack, short for Clandestine Proxy In the Middle of Proxy.

#PeckShieldAlert @USPD_io has reported an exploit resulting in a loss of ~$1M. Please revoke all token approvals to USDP contract.https://t.co/4mQqoE8EWO pic.twitter.com/IRo50xqhJL

What made this attack particularly sneaky was how well it was hidden. The hacker installed what security experts describe as a “shadow” implementation that cleverly forwarded everything to USPD’s properly audited contract. 

By manipulating event data and storage information, they tricked blockchain explorer Etherscan into showing the legitimate, audited code, even though they had secretly planted their malicious version underneath.

Attack Finally Strikes, Losing $1 Million

After months of lying dormant and undetected, the attacker finally struck. They upgraded the proxy contract, minted around 98 million USPD tokens out of thin air, and withdrew approximately 232 stETH tokens before draining nearly $1 million in liquidity

The attacker operated through two addresses, now labeled “Infector” address (0x7C9…19d83 and the other was “Drainer” address (0x0883…3215A).

10% Bounty For The Attacker

The USPD team is working with law enforcement and white-hat researchers to track the stolen funds. They have asked all users to revoke approvals to stay safe.

They also said they are open to treating the hack as a “white-hat rescue” if the attacker comes forward. 

To encourage this, USPD is offering a 10% bounty if the attacker returns 90% of the stolen assets.