Decentralized Finance Company Hack
Poly Network is a decentralized finance (DeFi) company. It allows its users to swap tokens across blockchains. On Tuesday, it announced the hack on its official Twitter handle. According to blockchain forensics company Chainalysis, the actors exploited a vulnerability in Poly Network’s digital contracts to steal the coins. They stole approximately $267 million in Ether, $252 million in Binance Coin, and $85 million in Tether. Poly Network wrote an open letter to the hackers. In it, it urged the hackers to talk to them and work out a solution. They also warned the hackers of the gravity of the crime and that law enforcement would pursue them. It also asked crypto miners and exchanges to “blacklist” transactions from the hacker’s addresses. On early Wednesday, an address, belonging to the hacker, returned $258 million worth of coins through several transactions.
Possible Reasons for Returning the Coins
According to reports, the alleged actor said that the hack was carried out for fun, saying that they wanted to expose the vulnerability and were not “very interested in money.” The hacker even put out a message with their cryptocurrency address and asked for donations from those who support his decision to return the tokens. Experts believe that the hacker returned the coins because it would be difficult to launder such a large amount. According to Tom Robinson, co-founder of Elliptic, a blockchain analysis company, laundering and cashing out crypto assets is extremely difficult. This is due to the transparency of blockchain, as well as the widespread use of blockchain analytics by financial companies. In response to the attack, Tether froze $33 Million worth of its digital token in the hacker’s address.
Spotlight on DeFi
Decentralized finance platforms let users conduct transactions without the involvement of banks or exchanges. This space has seen tremendous growth over the last year, as DeFi platforms handle over $80 billion worth of cryptocurrencies. On the other hand, losses from theft, hacks, and fraud related to DeFi are at an all-time high. According to CipherTrace, three-fourths of cryptocurrency hacks in 2021 involve DeFi. To learn more about how you can protect yourself from scams in 2021, check out our detailed resource here.
