Submitted by thekmj, also found by nirlin, Ruhum, Qeew, 33audits and fs0c.
The CToken implementation has the well-known first depositor bug that allows an attacker to manipulate the exchange rate of a CToken, allowing them to steal funds from depositing users.
Furthermore, due to the way the current BathHouse is implemented, not allowing an admin to create multiple markets for one underlying (see below code snippet), the entire BathHouse will be bricked as soon as any CToken market is attacked.
An attack can happen as follow:
Since it is intended that the BathTokens are created by an admin through the contract BathHouseV2.sol by calling createBathToken(), an adversary can perform the front-running attack as soon as a BathToken is deployed. 
It has been shown in the above section that a new market cannot be created on the same underlying, if such an attack were to happen.
There are several impacts that such an attack can have:
We believe this is high risk, as this will result in possible fund loss, will brick the deployed BathHouse contract, as well as loss of safety in supporting new assets.
Use the following test case on ProtocolDeployment.t.sol for a demonstration of the front-running attack.
The attack can happen when the CToken total supply is 0 or very low. The fix is to force-mint a minimum amount of CTokens that cannot be burned to either governance/admin, address(0), or perform such when the first mint happens.
A fix is demonstrated below, on the function mintFresh in contract CToken. This is also how Uniswap V2 prevents the same attack.
https://github.com/code-423n4/2023-04-rubicon/blob/main/contracts/compound-v2-fork/CToken.sol#L398-L449
daoio (Rubicon) acknowledged via duplicate issue #1156
neko_nyaa (warden) commented via duplicate issue #1156:
HickupHH3 (judge) commented:
