The Largest Crypto Hack in History! What’s Next?

The Largest Crypto Hack in History! What’s Next?

• DeFi hacks have been on the rise in 2021, as the Poly Network becomes the latest victim in the biggest hack recorded in the industry to date.
• More than $610 million was siphoned from the Poly Network by as yet unidentified hackers.
• The hacker has since announced that more funds, possibly worth up to $1 billion may have been moved from the Poly Network’s reserves.
• The Poly Network hacker has publicly claimed that he is ready to return the funds siphoned from this groundbreaking hack.

DeFi hacks and fraudulent cases have increased immensely over the recent months. In the first seven months of the year, the amount lost to DeFi-related hacks totalled $361 million, more than 3X the amount reportedly lost to DeFi hacks in 2020. DeFi fraud also accounted for 54% of all crypto fraud in the same period.

The Poly Network is the latest in a line of attacks on DeFi projects. On Tuesday, August 10th, The Poly Network announced that its network had been breached, and over $610 million was siphoned in the process.

The Biggest Hack in DeFi History

According to researchers at SlowMist, a cyber-security company, a total of more than $610 million worth of cryptocurrency was siphoned from the Poly Network, Making this the largest hack ever recorded in a DeFi project.

Once the hackers stole the money, they began to send it to various other cryptocurrency addresses. The stolen crypto was moved to three different addresses, and the funds were transferred into Curve.fi at the following addresses;

ETH: 0xC8a65Fadf0e0dDAf421F28FEAb69Bf6E2E589963

BSC: 0x0D6e286A7cfD25E0c01fEe9756765D8033B32C71

Polygon: 0x5dc3603C9D42Ff184153a8a9094a73d461663214

PeckShield notes that the root cause of the hack was a single compromised signer key on the Poly Network. The disclosure of the Poly network’s cross-chain signature private key facilitated the whole hack.

Are Stablecoins the Target?!

A huge chunk of the $610 million that was reportedly stolen was in stablecoins. Approximately $96 million worth of USD Coin, $32 million in Binance USD (BUSD), and $33 million in Tether (USDT) was siphoned in the hack.

Since the hack announcement, Tether has come out to assure traders that the part of the stolen funds that was in USDT ($33 million) have been frozen. However, the other stolen stablecoins, BUSD and USDC have not yet been frozen by Binance or Circle respectively.

It Could Have Been More?!

While $610 million worth of cryptocurrency is already a lot, the hacker behind the largest scale attack in DeFi history has come out to say that more funds could have been removed.

According to the hacker, the Poly Network would have lost more than $1 billion had they decided to move what they referred to as “sh*tcoins.” The hacker has stated that they are not specifically interested in the money, and are considering returning the stolen funds, or even “just leaving them there.”

On The Flipside

• Despite making the news as being on the receiving end of the largest DeFi hack, there could be positive news for Poly Network.
• The hacker has announced that they are ready to return the stolen funds, and has already begun the process, having returned the stolen USDC coins.

What’s Next?

The increasing number of hacks on DeFi networks speak to their susceptibility, and steps will have to be taken to improve the security of DeFi projects.

Before that can be done, Changpeng Zhao, the CEO of Binance has announced that Binance is “coordinating with all our security partners to proactively help,” the Poly Network.

Why You Should Care

Some of the major crypto regulations have been facilitated by crypto hacks and frauds. A hack of this magnitude could possibly, and hopefully for many, bring increased security measures to DeFi projects.

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