Hackers return $260 million to cryptocurrency platform after massive theft

The company at the core of one of the largest ever cryptocurrency heists announced on Wednesday that hackers have returned more than a third of the $613 million in digital coins they took. Poly Network, a decentralized banking network that supports peer-to-peer transactions, announced that $260 million stolen cash is back. But $353 million remained unclaimed.

The firm allows users to transfer tokens between multiple blockchains. It announced on Tuesday that someone hacked it. Then, they demanded that the cash stolen to be returned, threatening legal action if they did not. According to Chainalysis, a blockchain forensics firm, the hackers took advantage of a flaw in the digital contracts Poly Network employs to shift assets across blockchains.

“Expose the vulnerability”

According to digital messages given by Elliptic, a crypto monitoring firm, and Chainalysis, a person claiming responsibility for the breach said they did it “for fun”. They wanted to “expose the vulnerability” before others could exploit it.

It was “always the plan” to return the tokens, the purported hacker wrote. Adding: “I am not very interested in money”. The hackers or hacker is not yet known, and Reuters could not verify the authenticity of the messages.

The hassles of laundering stolen crypto on such a large scale, according to Tom Robinson, co-founder of Elliptic, may have influenced the decision to return the money.

Tether’s CEO said on Twitter that the company has frozen $33 million in connection with the attack. Also, officials from other crypto exchanges told Poly Network that they would also try to assist.

“Even if you can steal crypto-assets, laundering them and cashing out is extremely difficult, due to the transparency of the blockchain and the broad use of blockchain analytics by financial institutions,” said Robinson.

Poly Network also has not responded to demands for additional information. It was unclear where the platform was from or whether any law enforcement body was investigating the heist or no. The amount of digital currency taken was equivalent to the $530 million stolen from Tokyo-based exchange Coincheck in 2018. Mt. Gox, a Tokyo-based cryptocurrency exchange, went bankrupt in 2014 after losing half a billion dollars in bitcoin.

Fraud is reaching heights

According to crypto intelligence firm CipherTrace, losses from theft, hacks, and fraud related to decentralized finance (DeFi) have reached an all-time high.

The Poly Network theft, at $600 million, greatly outstripped the $474 million in criminal losses reported by CipherTrace. It was likewise for the whole DeFi sector from January to July. The crimes highlighted the perils of the largely unregulated industry and may attract regulators’ attention.

DeFi platforms allow parties to execute transactions directly. It is without the use of traditional gatekeepers such as banks or exchanges, usually in bitcoin. Over the last year, the industry has exploded, with platforms currently managing more than $80 billion in digital currency.

DeFi proponents claim that it provides free access to financial services to individuals and businesses. It also claims that the technology will reduce costs and stimulate economic activity. However, technological defects and holes in their computer programming may expose them to hacking.

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