Paradex Confirms Mithril Trading Bot Hack Affecting 57 User Keys

Paradex has confirmed a security incident linked to the Mithril Trading Bot. The derivatives trading platform said an attacker broke into Mithril’s internal systems. As a result, around 57 user subkeys were exposed.

These subkeys allow bots to trade on behalf of users. But they can’t withdraw funds. Because of this, Paradex said user balances remain safe. The company shared the update on their official X post. They warned users about the risks of connecting accounts to third party services. For many traders, the news came as a shock but Paradex moved fast to contain the damage.

What was compromised and who is affected

The breach only affected users who connected their accounts to the Mithril trading bots. The breach didn’t impact any other Paradex users. These subkeys grant only limited permissions. They can place trades but they can’t move or withdraw funds from user wallets. This design helped limit the damage from the attack.

Still, the incident shows how risky third party bots can be. When users connect external tools, they trust those platforms to protect their data. Paradex said it doesn’t control how outside services store or secure keys. For that reason, users must always check security standards before granting access. In short, the funds are safe but the trust took a hit.

Paradex responds with fast security actions

After discovering the breach Paradex took immediate steps. First, the platform paused all XP transfers. This pause is temporary and will be lifted soon. Then Paradex revoked all subkeys linked to Mithril trading accounts. This move cut off any further access from the compromised bot.

The company urged users to review all third party permissions. It reminded traders to only connect tools they trust. Many users praised Paradex for its quick response. Others said the incident highlights the growing risks in DeFi automation. Still, most agreed on one thing: limited permission keys saved the day.

$650,000 refunds follow earlier network outage

The Mithril incident comes shortly after another issue. On January 19, Paradex faced a network outage that caused pricing errors, during that glitch, Bitcoin briefly showed a price of $0. This led to incorrect liquidations across the platform.

After reviewing the affected accounts, Paradex issued refunds. The platform paid out $650,000 to 200 users. The company said it has now completed that review process. All wrongly liquidated users have received compensation. This follows Paradex’s earlier blockchain rollback after the incident.

Together, these events show how fast growing DeFi platforms face real world stress tests. But they also show why transparency matters. Paradex didn’t hide the breach. It disclosed it, explained the risks and fixed the problem. For traders, the lesson is clear: bots can boost profits but they also add risk. In DeFi, convenience is cool but security is king and trust? That takes work.