GMX Price Dives 20% After $40 Million Hack
On July 9, 2025, the on-chain perpetual and spot exchange GMX experienced a substantial security breach, resulting in the loss of approximately $40 million. The exploit has triggered a sharp decline in the value of the GMX token, highlighting the dangers and impact of persistent vulnerabilities within the decentralized finance space.
GMX announced that its V1 platform and GLP liquidity pool on the Arbitrum network were compromised, leading to the unauthorized transfer of around $40 million in tokens to an unknown wallet. The incident has sent shockwaves through the cryptocurrency market, with prices often dipping sharply amid such news.
The Root Cause of the Attack
Security experts have identified a critical design flaw in GMX v1's short position operations as the root cause of the attack. According to SlowMist, the attacker exploited a vulnerability that allowed them to update the global short average prices (globalShortAveragePrices), which directly impacts the calculation of Assets Under Management (AUM). This enabled manipulation of GLP token pricing and created massive short positions, artificially inflating GLP prices.
The highlighted code snippet from GMX's post illustrates the critical section where global short profit/loss calculations were exploited, enabling the manipulation. By leveraging the Keeper's ability to enable timelock.enableLeverage, the attacker profited through redemption operations.
GMX's Response
GMX has committed to investigating the incident with the assistance of security partners, promising a detailed update. The platform has also taken steps to mitigate further risks by disabling trading, minting, and redeeming of GLP on both Arbitrum and Avalanche.
"Out of an abundance of caution, GMX had already updated the caps for the GM tokens of GMX V2 on Arbitrum and Avalanche, so that minting new tokens is currently restricted in most liquidity pools. A follow-up notification will be sent out once this restriction is lifted," the platform wrote.
The Impact on GMX Price
The reaction of GMX holders to the hack was largely negative, with the price falling sharply to see the DEX protocol lag the overall crypto bounce. According to data from CoinMarketCap, the GMX token experienced a double-digit decline, trading above $14.54 but dropping more than 20% to lows of $10.40.
The breach of GMX adds to the list of key crypto protocol exploits in 2025, with Cetus Protocol among those to suffer a malicious attack a few months ago. Unless GMX successfully recovers the funds or implements robust security enhancements, the negative sentiment could impact its price. Currently, the GMX token trades near $11.45, still under pressure after falling from highs above $14.54.