On July 9, 2025, the decentralized perpetual futures exchange GMX, operating primarily on the Arbitrum Layer 2 network, suffered a $42 million exploit due to a vulnerability in its V1 protocol's smart contract logic. The attacker exploited a bug related to the calculation of globalShortAveragePrices and the GLP pool, enabling the minting of excess tokens and draining assets including Bitcoin, Ethereum, USDC, DAI, UNI, FRAX, WBTC, WETH, LINK, and USDT. Approximately $9.6 million of the stolen funds were bridged from Arbitrum to Ethereum, with the remainder retained on Arbitrum. The hacker converted most of the stolen assets into 11,700 ETH, worth around $35 million, and distributed them across multiple wallets. In response, GMX paused trading, minting, and redeeming on its V1 platform on both Arbitrum and Avalanche, while its V2 platform and token remained unaffected. GMX offered the attacker a 10% white-hat bounty, approximately $5 million, for the return of the stolen funds within 48 hours and promised no prosecution. Following this, the hacker began returning the assets, sending back over $37.5 million in cryptocurrencies, including about 9,000 ETH and 10.5 million FRAX. This recovery led to an 11.9% surge in the GMX token price. Security firms such as PeckShield and CertiK analyzed the incident, confirming the root cause and coordinating with the GMX team. The exploit has raised concerns about vulnerabilities in decentralized leverage markets and prompted calls for immediate security measures across similar protocols.