$611 Million Crypto Heist: DeFi Exchange Falls Prey To The Largest Crypto Attack Ever (Poly Network Hack)

In what is touted to be the single biggest cyberheist, a $611 million hack has rocked Poly Network, a blockchain-based platform, as it announced on Twitter. The theft covered $273 million in Ethereum tokens, $253 million in Binance Smart Chain tokens, and $85 million in USDC. $342 million have been returned to Poly Network, possibly triggered due to the difficulty in laundering such a massive amount.

Poly Network is a DeFi platform that facilitates peer-to-peer transactions and token swapping across many blockchains, including Bitcoin and Ethereum, among many others.

Swift Actions To Recover The Funds

The crypto assets included tokens, stablecoins, and cryptocurrencies on Ethereum, Binance Smart Chain, and Polygon. Stablecoins have a built-in fail-proof recovery mechanism where the company can freeze them to restore funds. Tether immediately froze $33 million of USDT stolen by the hacker, as tweeted by Paulo Ardoino, CTO of Tether.

Swiftly enough, Poly Network, the attacked decentralized finance (DeFi) platform, published details of the account that held the assets and communicated with exchanges to “blacklist” tokens coming from the account.

Binance CEO Changpeng Zeo released a statement that BSC cannot be controlled. Still, his organization will coordinate with its security partners and offer all the help it can.

What Could The Threat Actors Do With The Funds?

After a heist of such a large scale, hackers usually lie low and refrain from any significant activity to avoid being spotted. This pattern is evident in the heists in the last decade. The funds lie unmoved for years before the adversaries can spend or move them without being apprehended.

This crypto heist has topped the most significant historical crypto hacks to date:

  • Coincheck: $534 Million- In 2018, a Japanese exchange based in Tokyo, known as Coincheck, lost NEM worth $534 million in a cyberattack.
  • Mt. Gox: $460 million- Another Tokyo-based exchange, Mt. Gox, was forced into bankruptcy after a series of two attacks led to $460 million worth of Bitcoin being stolen.
  • BitGrail: $146 million- A major cyberattack on BitGrail, a cryptocurrency exchange in Italy, defrauded 230,000 people.

Here’s A Twist, Though! What Eventually Happened

In a twist of events, the attackers sent out communication embedded in transactions to themselves, willing to return the funds.

In response to this communication, Poly Network asked the alleged malicious actors to return the funds to accounts on all three affected blockchains.

The cyber adversaries stayed true to their words and have started returning funds. They have returned close to $342 million of the stolen funds on all three blockchains.

The transactions are watchable in real-time in the following links:

Why Did They Return The Funds?

There are two possible reasons for the online adversaries trying to return the funds.

Number 1: They have been tracked and are close to being identified

Slowmist, a cryptocurrency security firm, announced that it had tracked the attackers’ email, IP address, and device fingerprints and was about to track further clues leading to their identity. This development might have put the attacker into a dilemma, causing the return of the humongous amount of stolen cryptocurrency.

Number 2: The attacker is a white-hat hacker

After the attacker attempted to establish contact, communicating that they are ready to return the funds, Poly Network responded with addresses to deposit the funds.

Interestingly, the attackers also released a series of “Q&As,” which indicated that they intended to return the assets. They also expressed that this stunt was to help Poly Network protect its platform before anyone exploited the vulnerability to steal the funds.

Conclusion

These exciting turns of events have shown that it is challenging to complete a successful heist in the crypto world. Such attempts can be thwarted by the transparency of blockchains that enables real-time collaboration between protocol developers, blockchain analytics companies, and the crypto community. To protect crypto assets, one should prevent anyone else from obtaining their private keys, prevent losing those private keys by having backups and ensure good practices while dealing with cryptocurrencies.

About Author

Prashant Pasunuri is a content writer with 8+ years of experience in research and writing. He loves to write on a wide range of topics, including cybersecurity, technology, and sports. He also hosts two podcasts, creates engaging content, and loves to play snooker.

           

Leave a Reply

Your email address will not be published.