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The Saga of One of the Largest Cryptocurrency Thefts Ever

The decentralized finance platform Poly Network on Tuesday stated that cybercriminals exploited a vulnerability in its network to steal money. The hackers stole $600 million worth of crypto assets. Poly Network was ready to get in touch with the people who orchestrated the attack.

In a strange turn of events on Wednesday, they began returning some of the funds they stole one day earlier. Hackers returned nearly half of the $600 million they stole in what’s likely to be one of the most serious cryptocurrency thefts in history.

Hackers who stole crypto assets sent a message to Poly Network embedded in a cryptocurrency transaction. According to hackers, they were “ready to return” the funds. Poly Network responded requesting the money be sent to the crypto addresses. As of 7 a.m. London time, hackers returned more than $4.8 to the Poly Network addresses. By 11 a.m. hackers returned about $258 million.

Once the hackers gained access to money, they began to send money to various other cryptocurrency addresses. They transferred more than $610 million worth of cryptocurrency to three addresses. For instance, Tether made the decision to freeze $33 million connected with the hack. Other cryptocurrency exchanges also expressed their support to Poly Network.

 

Cryptocurrency and risk factors

The size of the cryptocurrency theft stated above was comparable to the $530 million in cryptocurrencies stolen from Coincheck in 2018. Another Tokyo-based cryptocurrency exchange the Mt.Gox exchange also suffered huge losses. It ceased to exist in 2014 after losing half a billion dollars in Bitcoin.

The latest main attack comes as losses from illegal activities related to DeFi hit an all-time high. Nonetheless, at $600 million, the Poly Network theft surpassed losses registered by the entire DeFi network from January to July.

The case of Poly Network illustrated risks of the mostly unregulated sector and may attract the attention of authorities.

Poly Network and other DeFi platforms, in general, allow parties to conduct transactions, usually in cryptocurrency. Thanks to DeFi platforms, there is no need to use traditional gatekeepers such as banks or exchanges. The mostly unregulated sector flourished over the last year, with DeFi platforms now handling more than $80 billion worth of cryptocurrencies. Supporters of DeFi say it offers people as well as businesses free access to financial services. The technology will reduce costs and boost economic activity according to supporters of DeFi. Nevertheless, technical flaws and weaknesses in their computer code can make them susceptible to hacks.

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