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Deythere > News > Crypto > GMX Confirms $40M Exploit—Can the Token Recover From $11.5?
CryptoMarketNews

GMX Confirms $40M Exploit—Can the Token Recover From $11.5?

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Alessia Moretti
Last updated: July 9, 2025 4:27 pm
By
Alessia Moretti
Published July 9, 2025
3 Min Read
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Decentralised trading platform GMX has confirmed a major security incident on its V1 protocol, leading to an estimated loss of around $40 million in tokens. The exploit, which targeted the GLP liquidity pool on Arbitrum, caused GMX Coin to plunge to $11.50—down nearly 25% within hours.

Contents
Details of the Attack and Platform ResponseWill There Be Compensation?Technical Risk: High Volatility on Both SidesConclusion

The Dey There team reviewed the technical response and market reaction, offering insights into what traders can expect in the coming days. While the decline appears to have stabilised near $11.80, investor sentiment remains fragile and highly reactive to future announcements.

Details of the Attack and Platform Response

According to an official statement, the exploit was isolated to GMX V1 on Arbitrum and did not impact GMX V2 or its native token directly. The GLP minting and redemption processes, along with all V1 transactions, have been paused on both Arbitrum and Avalanche to prevent further damage.

“Security has always been a top priority,” the GMX team noted. “All core contributors are currently investigating the attack vector and root cause.”

In a follow-up advisory, GMX recommended that forks of its V1 protocol immediately disable leverage features and set maxUsdgAmounts to “1” to prevent further GLP minting vulnerabilities. Importantly, a value of “0” would allow unlimited minting—a critical distinction for developers.

Will There Be Compensation?

As of now, no compensation program has been announced. This uncertainty is adding to the volatility. If a refund or insurance model is introduced promptly, it could trigger a short squeeze and push the price higher, with short positions being forcefully liquidated.

Key levels to watch in a bullish reversal scenario include $13.00 and $13.60. These zones could act as upper wicks in a recovery spike. However, if no compensation is provided or sentiment worsens, the next strong support lies at $9.50—a zone tested during April’s flash crash.

Technical Risk: High Volatility on Both Sides

The current setup presents risk in both directions. High leverage positions—long or short—are dangerous due to ongoing uncertainty. Any headline about recovery funds or additional losses could trigger extreme price action. Dey There advises caution, especially as price action consolidates within a volatile range.

Conclusion

While the hack has undoubtedly shaken confidence in GMX V1, the incident appears contained for now. With transparency, swift communication, and possible restitution, the platform may be able to recover user trust. Until then, GMX Coin remains a high-risk, high-reward asset.

References:

  • GMX Official Post-Mortem Updates – gmx.io
  • Arbitrum Blockchain Explorer – arbiscan.io
  • DeFiLlama Protocol Analytics – defillama.com
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ByAlessia Moretti
Alessia Moretti is a blockchain and cryptocurrency analyst with 7 years of experience in the field. With a strong foundation in economics and a passion for technology, Alessia has been involved in a variety of international blockchain projects, focusing on the development of decentralized applications and financial products. Her work is characterized by a deep understanding of both the technical and economic aspects of blockchain technology. At DT NEWS, Alessia provides readers with in-depth analysis of global blockchain trends and market movements, helping them stay informed about the future of digital finance.
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