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DeFi exploit dominated 2021, and 2022 is already following in its footsteps. This year has recorded a number of crypto hacks already, and the latest platform to be exploited is cross-chain protocol Wormhole. Yesterday, Wormhole tweeted about a potential crypto hack in their platform, leading to a temporary network shutdown.
The Wormhole team later confirmed the incident around 11.45 pm, adding that the network lost 120k of wrapped Ethereum tokens on the Solana bridge. However, the Wormhole team has assured users that the platform will boost Ether supply and make sure that wETH is backed in the ratio of 1:1.
Meanwhile, the team gave no definitive timeline on the release of ETH although they tweeted that the supply would occur in the next few hours. As of the time of this writing, ETH supply hasn’t been released.
Details About the Hack Occurrence
The hack was first reported by some community members after witnessing large transactions occur on 2nd February 2022. The criminals minted 120k wrapped ETH on the Solana blockchain, out of which 93k was turned into Ether. The total worth of the ETH as of the time of the hack was $254 million.
According to reports, the malicious actors used some of the converted funds to purchase SportX, Karma, BAYC token, etc. The remaining wETH was exchanged for SOL and stablecoin USDC on the Solana network. Presently, about 432k SOL is left in the criminal’s wallet.
Wormhole Offers a White Hat Agreement to Hackers
Reports disclose that the Wormhole team has contacted the hacker after confirming the exploit. Instead of apprehending the culprit, the team agreed to offer $10 million for the hack in exchange for the wrapped Ether minted on one of the bridges.
It’s not yet known if the hacker has responded to the team’s request, but Wormhole is optimistic that extending their hand of friendship will convince the hacker to return the stolen funds. Meanwhile, the team has guaranteed the users that the loophole has been taken care of, even though the platform remains non-functional at the moment.
While it has not been confirmed yet by Wormhole if other assets and bridges are affected, prominent blockchain security outfit Certik, thinks that Terra could have been exploited too. Also, it’s not been revealed when the protocol will be fully operational.
Wormhole exploit is the second DeFi hack in 2022 after Qubit Finance. The Binance Smart Chain-based protocol lost $80 million to hackers. Still they are not the biggest DeFi hacks in the last couple of years. Poly Network’s hack remains the largest with over $600 million lost. The good news was the hackers returned the funds and received $500k, a similar approach taken by Wormhole.
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