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Crypto Platform Says $320m in Tokens ‘Safe’ Despite Hack


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Wormhole, a DeFi platform that said $320 million in ether tokens had been stolen by hackers, put out a notice late on Thursday to say all tokens and funds were ‘safe’


Ether token hit a record high
Babel's major businesses are crypto lending and trading limited to bitcoin, ethereum and stablecoins. Photo: Reuters.

 

Hackers allegedly stole cryptocurrency worth more than $320 million from a decentralised finance platform, the fourth-largest crypto heist on record and the latest to shake the fast-growing DeFi sector.

But late on Thursday Asia time, Wormhole – a site that allows the transfer of information from one crypto network to another – put out a message to say the ‘theft’ 120,000 units of a version of ether, the second-largest cryptocurrency, had been resolved.

The platform put a notice on its Telegram channel that said “all funds are safe“.

However, it gave no further details  and did not respond to media requests for comment.

Earlier, the London-based blockchain analysis firm Elliptic said that attackers were able to fraudulently create the wETH tokens, almost 94,000 of which were later transferred to the ethereum blockchain, which powers transactions for ether.

Wormhole put out a tweet early on Thursday to say it had fixed the vulnerability in its system but was still working to get the network back up.

So-called DeFi platforms allow users to lend, borrow and save – usually in cryptocurrencies – while bypassing traditional gate-keepers of finance such as banks.

Cash has poured into DeFi sites, mirroring the explosion of interest in cryptocurrencies as a whole. Many investors, facing historically low or sub-zero interest rates, are drawn to DeFi by the promise of high returns on savings.

 

Major Hacking Risk

Yet with their breakneck growth, DeFi platforms have emerged as a major hacking risk, with bugs in code and design flaws allowing criminals to target DeFi sites and deep pools of liquidity, and also to launder the proceeds of crime, while leaving few traces.

Fraud and theft at DeFi platforms surpassed $10 billion last year, research showed on Thursday, laying bare the risks in the fast-growing but mostly unregulated area of cryptocurrencies.

In August, hackers behind likely the biggest ever digital coin heist returned nearly all of the $610 million-plus they stole from the DeFi site Poly Network.

Hacks have long plagued crypto platforms. In 2018, digital tokens worth some $530 million were stolen from Tokyo-based platform Coincheck. Mt Gox, another Japanese exchange, collapsed in 2014 after hackers stole half a billion dollars of crypto.

So, what exactly happened at Wormhole? We’ll have to wait and find out.

 

• Reuters with additional editing by Jim Pollard

 

ALSO SEE:

After Huge Crypto Heist, $342 Million is Returned to Poly Network

Crypto Scams Getting Bigger and More Sophisticated

A regulated crypto market will make bitcoin safer for investors

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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years and has a family in Bangkok.

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