Key Takeaways:
- GMX V1 was exploited for $40 million due to a design flaw in asset calculation, leading to halted trading and GLP minting.
- The vulnerability is isolated to GMX V1 on Arbitrum and Avalanche, with GMX V2 and the GMX token unaffected.
- GMX advised immediate security steps to V1 fork operators to prevent further exploitation.
Decentralized derivatives platform GMX has suspended trading and GLP token minting on its V1 protocol following a $40 million exploit.
The breach targeted liquidity pools on the Arbitrum network containing assets like Bitcoin, Ether, and various stablecoins.
URGENT: for all GMX V1 forks, GMX V1 has been exploited.
— GMX 🫐 (@GMX_IO) July 9, 2025
The issue could potentially be mitigated by doing the below:
1. Disable leverage: this can be done by setting Vault.setIsLeverageEnabled(false) or, if Vault Timelock is used, by setting… https://t.co/BbcUSaXyq9
The stolen funds were transferred to an unknown wallet, prompting immediate action from the platform.
In response, GMX halted GLP minting and redemption on both Arbitrum and Avalanche networks to prevent further losses.
The team issued urgent instructions to all V1 fork operators, advising them to disable leverage using either Vault.setIsLeverageEnabled(false) or Timelock.setShouldToggleIsLeverageEnabled(false), and to set maxUsdgAmounts to “1”.
They emphasized that setting it to “0” would allow unlimited minting, worsening the situation.
🚨Update:
— SlowMist (@SlowMist_Team) July 9, 2025
A @GMX_IO developer appears to have acknowledged a vulnerability in GMX V1 via on-chain message to the exploiter, offering a 10% whitehat bounty in exchange for returning the stolen funds.
🔗 Msg Tx: https://t.co/VCMjzn9uYB pic.twitter.com/DcbGUGXPcE
GMX clarified that the exploit is limited to V1, and does not affect GMX V2, its markets, liquidity pools, or the GMX token itself.
According to blockchain security firm SlowMist, the attacker exploited a design flaw in how total assets under management were calculated, manipulating the GLP token price.
This incident highlights the persistent security risks in DeFi and adds to the growing list of crypto platform breaches in 2025.
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