Hackers Returned $260 million to Crypto Platform

Hackers Returned $260 million to Crypto Platform

The victim of one of the largest cryptocurrency thefts in history said that hackers had recovered more than a third of the $620 million in stolen digital currencies.

Poly Network, a decentralized banking network that allows peer-to-peer transactions, tweeted that around $250 million of the stolen cash had been recovered, but $350 million had still not been returned.

The company, which allows users to trade digital currencies between different blockchains, said Tuesday that it had been hacked and demanded the stolen money back, threatening a lawsuit if it didn't.

Chainalysis reports that hackers have exploited a flaw in the smart contracts that Poly Network uses to move assets between blockchains.

Based on digital reports provided by Chainalysis and a cryptocurrency monitoring company Elliptic, the person who took responsibility for the hack said they did it for fun and wanted to show a vulnerability before others could take advantage of it.

The claimed hacker said that returning the tokens was "always the goal," adding, "I am not particularly interested in money."

The hacker was not identified, and mass media were unable to verify the origin of the messages.

According to co-founder of Elliptic, Tom Robinson, the problems of laundering stolen cryptocurrencies on such a massive scale may have prompted the decision to bring the money back.

The CEO of Tether said on Twitter that the company had frozen $33 million related to the hack, and representatives from other cryptocurrency exchanges told Poly Network that they would also try to help.

"Even if you can steal cryptoassets, laundering and taking them out is exceedingly difficult owing to the blockchain's openness and financial institutions' widespread usage of blockchain analytics," Robinson added.

Poly Network has not responded to demands for further information. It was unclear where the platform was situated or whether the robbery was being investigated by any law enforcement body.

The total amount of stolen cryptocurrencies was equal to the $500 million stolen from the Tokyo-based exchange CoinCheck in 2018. Mt. Gox, another exchange in Tokyo, collapsed in 2014 after losing $500 million in crypto.

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

The Poly Network heist, at $600 million, considerably outstripped the $474 million in criminal losses reported by CipherTrace for the whole DeFi industry from January to July. The crimes highlighted the hazards of the largely unregulated industry and may attract authorities' attention.

DeFi systems allow parties to make transactions directly without the use of traditional gatekeepers such as exchanges or banks, generally in digital assets. Over the last year, the industry has exploded, with platforms currently processing more than $80 billion in digital currencies.

DeFi proponents claim that it provides free access to financial services to individuals and companies, claiming that the technology would reduce costs and promote economic activity. However, technological faults and holes in their computer code may expose them to hacking.