The whizkids over at the Solana-fueled Cypher Protocol did a jaw-dropping magic trick: they’ve frozen a whopping $600,000 in hot crypto right out of the hands of some crafty cyber bandits. Ouch, that’s gotta sting for the culprits
Here’s the skinny: Back on a not-so-fine day, August 7th to be exact, Cypher had a wee bit of a hiccup. Some sneaky Pete exploited a glitch, pilfering around a cool million from their coffers. That’s like letting your guard down and having someone swipe the pie right out of your window!
Jump to Aug. 18, and Cypher comes out swinging with some big news. In a tweet, they let the cat out of the bag – they’ve put the brakes on over half of the stolen loot, and that’s thanks to some real Sherlock Holmes types from the blockchain world.
But here’s the kicker: getting those funds back ain’t a walk in the park. It’s all up in the air, depending on whether the big centralized exchanges (or CEXs, for those in the know) play ball and if the cops issue the go-ahead with seizure warrants. Fingers crossed, folks!
Now, what got Cypher in this pickle? Their DeFi platform lets folks lend and borrow, using some fancy sub-accounts. But a chink in their armor meant they couldn’t keep tabs on these sub-accounts. Not to mention, some, let’s call it “lax”, margin checks. The good folks at Halborn – those blockchain security brainiacs – spilled the beans on this.
The sneaky culprit? They went to town, using this slip-up to make off with a variety of crypto goodies like USDT, SOL, wETH, and a sprinkle of other altcoins. Naughty, naughty!
By Aug. 10, Cypher tried a little carrot-and-stick approach, waving a tempting 10% white hat bounty (that’s about $120K, for those counting pennies) to chat with the hacker. But alas, the rogue player ghosted them. Bummer!
Come Aug. 16, Cypher got their ducks in a row, unveiling a plan to distribute what was left to the affected users. And for the real nitty-gritty: the value for the hand-back? About 31 cents for every dollar at the time everything went belly-up.
Big shoutout to the blockchain detective, ZachXBT. The guy’s a gem! He’s been the MVP for the Cypher team, helping freeze those stolen funds across multiple exchanges and playing a huge part in tracking down Mr. or Ms. Mischief. Hats off to you, buddy! (Although, Cointelegraph tried to get his side of the story, but he’s proving a tough nut to crack. Radio silence.)
Now, if you think this Cypher fiasco takes the cake for August, think again! Zunami got a real shocker with a $2.1 million hit, and Steadefi lost a neat $1.1 million, both in the same month. Yikes! Keep those digital wallets close, folks, it’s a jungle out there!