• Crypto-Hackers Begin Returning Stolen Tokens—$600 Million Still Missing Following Massive Heist

  • Topline

    In an unusual twist for one of the largest cryptocurrency heists in history, hackers who stole over $600 million in tokens from blockchain-based platform Poly Network appear to have begun sending back small amounts of the stolen funds, according to publicly documented data confirmed to show the transactions early Wednesday morning.

    Important Facts

    Transactions made public on the blockchain show that an address belonging to Poly’s hacker returned nearly $4.8 million in assets in three separate transactions early Wednesday.

    So far, Poly, a player in the burgeoning decentralized finance space, has confirmed that it has received approximately $2.7 million in ether, as well as slightly more than $1 million each on blockchain networks Binance Smart Chain and Polygon—which means that approximately $600 million in stolen funds have yet to be recovered.

    In a separate transaction earlier Wednesday, the hacker address sent Poly a small amount of ether with the note “READY TO RETURN THE FUND!”

    Poly demanded in a series of tweets that the hacker begin returning the funds to three cryptocurrency wallet addresses, claiming that the money that was stolen belonged to “tens of thousands of crypto community members.”

    In an email to Forbes, Tom Robinson, the chief scientist at blockchain analytics firm Elliptic, confirmed the transactions and stated that he believes the hacker’s decision to return the funds “demonstrates that even if you can steal cryptoassets, laundering and cashing out is extremely difficult due to the transparency of the blockchain.”

    Background Information

    Tuesday’s hack on Poly is one of the largest in cryptocurrency history, surpassing the $460 million hack on cryptocurrency exchange Mt. Gox seven years ago, which led to the company’s bankruptcy and increased regulation in the nascent space. Poly urged cryptocurrency miners and exchanges to “blacklist” tokens coming from the hacker’s addresses shortly after the Tuesday morning exploit, and many quickly heeded the call. Executives at some of the world’s largest cryptocurrency exchanges, including Huboi, OKEx, and Binance, said they were monitoring their platforms for any hacker activity.

    Binance’s billionaire CEO, Changpeng Zhao, stated that the company, which serves as the primary operator of the blockchain on which binance coins are built, will coordinate with its security partners and “do as much as [it] can” to assist. Meanwhile, OKEx CEO Jay Hao stated that the company is “watching the flow of coins and will do [its] best to manage the situation.”

    What to Look Out For

    The hack has resulted in legal action and potential regulation. SEC Chairman Gary Gensler said less than a week ago that thriving decentralized finance platforms, also known as DeFi, deserve more government scrutiny and compared the space to the “Wild West.” According to the crypto intelligence firm CipherTrace, DeFi has been linked to more than 75% of cryptocurrency hacks this year.

    a large number

    $103.0 billion According to the cryptodata website CoinGecko, this is the current market value of all decentralized finance tokens (including Polygon). This year, the space surpassed a $100 billion valuation for the first time, peaking at around $150 billion in May before the broader crypto market crashed nearly 50%.

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