The blockchain ecosystem continued to evolve rapidly in April 2020, but with growth came increased exposure to security vulnerabilities. Despite advancements in decentralized finance (DeFi) and smart contract platforms, a wave of cyberattacks highlighted critical weaknesses across the industry. According to threat intelligence data, 24 publicly disclosed blockchain security incidents occurred that month—ranging from smart contract exploits and application vulnerabilities to phishing scams and 51% attacks.
These events not only caused financial losses but also exposed systemic risks in emerging DeFi protocols and user-facing applications. This comprehensive analysis dives into the most significant breaches, identifies recurring attack patterns, and provides actionable recommendations for developers and users alike.
👉 Discover how blockchain platforms can prevent costly exploits before they happen.
Breakdown of April 2020 Blockchain Security Incidents
In April 2020, the distribution of security threats across the blockchain space was as follows:
- Smart contract attacks: 3
- Application vulnerabilities: 5
- Malware incidents: 4
- 51% attacks: 1
- Fake EOS attacks: 1
- Malicious fraud schemes: 8
- Phishing attacks: 2
While malicious fraud remained the most frequent category, there was a notable rise in both application-level and malware-related attacks compared to previous months. More importantly, high-profile smart contract exploits—such as those targeting imBTC, Lendf.me, and Hegic—underscored the urgent need for stronger code auditing and runtime safeguards in DeFi projects.
In-Depth Analysis of Major Smart Contract Attacks
1. imBTC Pool Drain via Reentrancy on Uniswap (April 18)
On April 18, attackers exploited a compatibility flaw between Uniswap and the ERC-777 token standard used by imBTC—an ERC-20 token pegged 1:1 to Bitcoin. By leveraging multiple calls to tokensToSend, the hacker executed a reentrancy attack during ETH-imBTC swaps, repeatedly withdrawing funds before balances were updated.
This incident drained the entire imBTC liquidity pool on Uniswap and served as a stark reminder of the risks associated with integrating new token standards into existing decentralized exchanges.
2. Lendf.me Suffers $25 Million Reentrancy Exploit (April 19)
Just one day later, the decentralized lending protocol Lendf.me fell victim to a similar reentrancy vulnerability. Attackers manipulated balance states during external calls, allowing them to borrow increasing amounts of imBTC in a compounding fashion—each withdrawal double the previous.
Ultimately, approximately $25 million worth of digital assets were withdrawn. Although the hacker returned all funds shortly after, likely due to public identification pressure, the event shook confidence in early-stage DeFi platforms’ security readiness.
3. Hegic Locks User Funds Due to Code Flaw (April 23)
Shortly after launching on Ethereum’s mainnet, options trading platform Hegic encountered a critical bug that locked $28,000 worth of user funds inside expired option contracts. The flaw prevented users from reclaiming their collateral, highlighting how minor coding errors can have immediate financial consequences—even without malicious intent.
Although no funds were stolen, the incident emphasized the importance of rigorous pre-launch testing for yield-generating protocols.
🔐 Smart Contract Security Best Practices
To mitigate such risks, development teams should adopt the following measures:
- Follow secure coding patterns: Always update internal state before making external calls.
- Conduct third-party security audits prior to deployment.
- Implement circuit breakers or pause functions to halt operations during emergencies.
- Use established libraries and avoid experimental features unless thoroughly vetted.
👉 Learn how secure blockchain development practices can protect user assets at scale.
Application Vulnerabilities and Infrastructure Risks
Kraken’s Custodian Suffers Data Breach (April 18–24)
Etana, a custodial service provider for exchange giant Kraken, reported an unauthorized access incident affecting its client interface. While customer funds remained safe, sensitive user data may have been exposed. This breach illustrates that even trusted custodians are vulnerable to backend infrastructure compromises.
MakerDAO Responds to Black Thursday Crisis
Although the March 12–13 “Black Thursday” event spilled into April reporting cycles, MakerDAO’s post-mortem analysis revealed systemic flaws triggered by extreme market volatility. As ETH prices dropped nearly 50%, network congestion prevented timely liquidations. One bidder acquired 62,843 ETH for close to zero DAI due to failed auction participation.
In response, MakerDAO implemented key upgrades:
- Introduced the ability to pause auctions instantly.
- Added USDC as a backup collateral source.
- Limited batch sizes and required minimum bidders per auction.
- Launched new web tools to improve auction transparency and participation.
These changes reflect a growing trend toward resilient protocol design in volatile markets.
Phishing and Social Engineering Threats
New Zealand Authorities Warn About Sextortion Scams (April 13)
Cybercriminals sent emails claiming victims’ devices were compromised and that explicit videos would be shared unless 1,900 USD in Bitcoin was paid. These messages included real passwords leaked from past data breaches—lending credibility to the scam.
This classic phishing tactic preys on fear and urgency. Users are urged to:
- Never click unverified links.
- Verify sender identities carefully.
- Install antivirus software and only download apps from official sources.
- Seek expert help if targeted by ransom demands.
51% Attack on PegNet: Price Manipulation Without Fund Loss
On April 23, PegNet, a stablecoin platform built on Factom’s PoW consensus, suffered a 51% attack. Four miners controlling nearly 70% of the network’s hashing power colluded to submit false price data. They inflated a wallet balance from $11 to a nominal **$6.7 million** by exploiting manipulated exchange rates between pJPY and pUSD.
Although no user funds were stolen—and the attack lasted only about 20 minutes—it exposed a fundamental flaw: reliance on miner-submitted oracle data without sufficient validation mechanisms.
Key Blockchain Security Takeaways from April 2020
Core keywords identified:
blockchain security, smart contract attack, DeFi exploit, phishing scam, 51% attack, reentrancy vulnerability, application vulnerability, malware attack
These incidents collectively highlight several ongoing challenges:
- Rapid DeFi innovation often outpaces security validation.
- Integration of new token standards introduces unforeseen risks.
- User education remains critical in combating social engineering.
- Consensus-layer attacks, while rare, can undermine price stability.
Developers must prioritize auditability, modularity, and emergency response planning. Meanwhile, users should practice caution when interacting with new protocols or unsolicited communications.
Frequently Asked Questions (FAQ)
Q: What is a reentrancy attack in smart contracts?
A: A reentrancy attack occurs when a malicious contract repeatedly calls back into a vulnerable function before the initial execution completes—often draining funds by manipulating balance checks.
Q: Can 51% attacks steal user funds directly?
A: Not always. While they enable double-spending and data manipulation, many modern blockchains protect user wallets through cryptographic signatures. However, consensus integrity can still be compromised.
Q: How can I protect myself from crypto phishing scams?
A: Avoid clicking unknown links, verify email senders, use hardware wallets, enable two-factor authentication, and never share private keys.
Q: Why did the Lendf.me hacker return the stolen funds?
A: It’s believed the attacker was identified through blockchain analysis or social pressure. Returning funds may have been an attempt to avoid legal consequences.
Q: Are DeFi protocols inherently unsafe?
A: Not inherently—but many early projects launched without full audits or fail-safes. As the sector matures, improved tooling and governance are enhancing overall security.
Q: What role do third-party audits play in blockchain security?
A: Independent audits help detect logic flaws, vulnerabilities, and edge cases before deployment—significantly reducing the risk of exploits.
👉 Explore best-in-class security strategies for next-gen blockchain applications today.