After stealing over US$610 million (nearly S$828.75 million) from blockchain company Poly Network, a hacker returned US$341.6 million (over S$464.097 million), part of the stolen amount to the organisation.
Poly Network announced on Twitter that the hacker still needs to hand over the remaining US$268 million (more than S$364.1 million) on Ethereum. But before the firm received payments from a person that was later on referred to as “Mr. White Hat", it asked the hacker to give back the “hacked assets”. The post also emphasised how the instance of decentralised finance (DeFi) theft is the biggest one ever.
Even before there was news about the money being recovered, some Twitter users thought that the hacker would do the right thing, considering the entire theft as a white hat effort. A white hat is a type of hacker who exposes a computer system’s security vulnerabilities to help an organisation address those weaknesses.
Nearly seven hours after Poly Network tweeted the bitcoin addresses that can be used to transfer the assets, the hacker gave into the request and began returning millions of US dollars to the blockchain firm.
Tom Robinson, Chief Scientist at blockchain analytics organisation Elliptic, believes that the hacker was pressured into surrendering the money as the individual might have experienced problems preventing them from profiting from the hack.
“I think this demonstrates that even if you can steal cryptoassets, laundering them and cashing out is extremely difficult, due to the transparency of the blockchain and the use of blockchain analytics. In this case, the hacker concluded that the safest option was just to return the stolen assets,” said Robinson.
Blockchain is an unalterable ledger of activities that facilitate and record cryptocurrency transactions. Each digital coin will have a dedicated blockchain and every blockchain is unique. As a DeFi company, Poly Network uses blockchain to offer financial services without the help of intermediaries such as brokerages, exchanges and bank interferences.
According to crypto crime watchdog CipherTrace, DeFi-related hacks totalled US$361 million (over S$490.45 million) from January to July 2021 and constituted 76% of large-scale hacks this year. Along with DeFi-related hacks, DeFi-related fraud is a growing threat. By the end of July 2021, DeFi-related fraud made up 54% of major crypto fraud volume, while that statistic was just 3% in 2020.
Written by Sophia Lopez