Hackers steal $320 million in latest DeFi hack

defi hack

Wormhole, the token bridge between Solana and decentralized finance blockchain networks has suffered a massive security breach that has enabled hackers to decamp with no less than 120,000 wrapped Ether (wETH) tokens. The loss can be estimated to be around a whopping $322 million and is easily the biggest hack involving cryptocurrency in 2022 so far. The hack also points to the emerging trend wherein decentralized finance platforms or DeFi has emerged as the latest target of cybercriminals.

The Wormhole team however stated they are working to add Ether to make for each Ether lost to the hackers so that the network is back up and running again. The management however didn’t elaborate where they intend to source the Ether from. The project team also stated the vulnerability exploited by the hackers has been patched and that no one should have any reason to worry as all funds are safe and accounted for even as they are also offering a bug bounty of $10 million to anyone who helps bring the funds back.

The hack has been traced to the Solana end of the token bridge. The wETH token, meanwhile, is a different token that is based on the Binance Smart Chain (BSC) of the Ethereum platform’s ERC20 system. Many have expressed caution that the Terra bridge too might not be robust enough to withstand a similar hacking attempt. The security team though has ruled out such while also assuring that the wETH supply would be restored soon.

Token bridges of the sort of Wormhole enable users to receive cryptocurrencies of all forms, be it Ether, Solana, Binance Smart Chain (BSC), Polygon, Oasis, Avalanche, and Terra, or whatever. The obvious benefit here is that there is no need for a centralized exchange that would be acting as the custodian. That said, DeFi platforms have run into security issues earlier as well which underscores its serious vulnerabilities. A similar hack reported last December led the hackers to steal  $14 billion cryptos.

The hackers meanwhile have been found to convert the stolen fund to quickly make other purchases to cover their trace and convert it into fiat currency. For instance, some Solana tokens were used to procure USDC. Further, some of the funds have been used to buy SportX (SX), Meta Capital (MCAP), Finally Usable Crypto Karma, and Bored Ape Yacht Club (BAYC) tokens.

About the author

Sovan Mandal

A keen tech enthusiast who loves to keep a tab on the tech scene, with special emphasis on things like smartphones, tablets, laptops, convertibles and such. Cars happen to be his other passion, not to mention the recent trend here comprising of electric cars and autonomous cars. Off late, he has also started tinkering a bit with stuff like electronic circuits, electric motors a bit though he's just a novice there.