DeFi protocol Platypus is in talks with Aave and stablecoin issuer Tether to recover funds stolen from last week’s exploit.
In a major announcement on Thursday, February 23, decentralized finance (DeFi) stablecoin Platypus Finance announced significant compensation for users affected by the recent exploit.
In a huge exploit, hackers mined more than 49 million of the protocol last week. Platypus said that it would return a minimum of 63% of the funds to its users after the funds are recovered. To confirm the identity of the exploiter, the DeFi Platypus protocol worked with the Binance crypto exchange.
The hacker was using a Binance account that went through KYC checks for a withdrawal request. DeFi protocol Platypus said they have contacted law enforcement and filed a complaint in France.
In last week’s Platypus hack, the hacker exploited a bug in the platform’s credit-check mechanism. As a result, the hacker managed to steal $9.2 million worth of digital assets, causing the USP of the platform’s native stablecoin to lose peg to the dollar.
The Platypus DeFi protocol suffered three consecutive attacks
in its blog postPlatypus explained that the exploit consisted of three consecutive attacks. The first was one of the most severe, draining a total of $8.5 million worth of stablecoins like Tether’s USDT, Circle’s USDC, Maker’s DAI, and Binance’s BUSD from the main DeFi protocol pool.
The DeFi protocol managed to recover $2.4 million worth of stolen USDC stablecoins with the help of security company BlockSec. Additionally, Tether also froze $1.5 million in stolen USDT.
The second attack mistakenly transferred $380,000 worth of stablecoins to the popular Aave lending protocol. The DeFi protocol Platypus approached the Aave governance forum for the launch of those assets.
During the third attack, $287,000 worth of assets were stolen. Platypus has to consider these funds as unrecoverable and lost as the hacker moved the stolen assets through the Tornado Cash crypto mixer and the Aztec Network encryption service.
In their blog post, Platypus also mentioned that they have not used their $1.4 million treasury reserves to compensate the victims of the attack. However, if Platypus is unable to recover more assets in the next six months, they may have to draw on treasury funds.
If Tether could help recall the frozen USDT and Aave approves the recovery proposal, a total of 78% of user funds will be recovered. The DeFi player said that they plan to bring back the stablecoin exchange protocol next week, without their stablecoin USP untied.
next
Bhushan is a FinTech enthusiast and has a good knack for understanding financial markets. His interest in economics and finance draws his attention to the new emerging markets of Blockchain technology and cryptocurrencies. He is continuously in a learning process and stays motivated by sharing the knowledge he has acquired. In his spare time, he reads thrillers and sometimes explores his culinary skills.
