Poly Network, a cross-chain DEFI protocol, has been compromised, resulting in $611 million in cryptocurrency losses. The protocol’s team is asking exchanges to prevent the stolen money from getting into the hands of criminals. The Poly Network hack is considered the largest DeFi hack yet.
We are sorry to announce that #PolyNetwork was attacked on @BinanceChain @ethereum and @0xPolygon Assets had been transferred to hacker's following addresses:
— Poly Network (@PolyNetwork2) August 10, 2021
Three addresses are presently associated with suspected attackers. The first two are Ethereum ($264.8 million in crypto) and Binance Smart Chain ($250.8 million). Polygon is the third ($85 million).
270 million Ether tokens, which are worth approximately $267 million, the 620 million Binance coins, which are worth more than $252 million, and approximately $85 million in USDC tokens were all sent from the Polycoin cross-chain interoperability network.
This hack was even larger than the $460 million attack of cryptocurrency exchange Mt. Gox that led to the company’s collapse and heightened regulation in the fledgling sector around seven years ago. Such has allowed this to be the biggest cryptocurrency hack up to this point. Coincheck lost almost $530 million to hackers in January 2018, while the previous record was held by an exchange, Coincheck, which lost $529 million in March 2017.
As Poly Network interoperates with numerous protocols, other projects that adopt it could be affected as well. On the website of the protocol, hundreds of additional crypto projects are listed as a part of the platform. Almost immediately after the breach, O3 Swap-based cross-chain pool paused its cross-chain capabilities.
Paolo Ardoino, Tether’s chief technical officer, said the firm froze $33 million in cryptocurrency that had been stolen by a hacker.
— Paolo Ardoino (@paoloardoino) August 10, 2021
After the huge breach, crypto-exchange operators commented. The CEO of cryptocurrency exchange Binance, Changpeng Zhao, said on Twitter that the exchange that supports the blockchain on which Binance coins are created would do as much as it can to assist secure it. Meanwhile, OKEx CEO Jay Hao stated the firm would “watch the flow of coins.”
We are aware of the https://t.co/IgGJ0598Q0 exploit that occurred today. While no one controls BSC (or ETH), we are coordinating with all our security partners to proactively help. There are no guarantees. We will do as much as we can. Stay #SAFU. 🙏 https://t.co/TG0dKPapQT
— CZ 🔶 Binance (@cz_binance) August 10, 2021
After the Poly hacking, the hacker attempted to transfer the stolen funds, including USDT, into the liquidity pool Curve.fi by using the Ethereum address. The transaction was declined.
Meanwhile, about $100 million has been removed from the Binance Smart Chain’s Binance-owned address and transferred to Ellipsis Finance’s liquidity pool. The hacker later sent a transaction explaining some of his motivations for the hack, stating that he or she is not money-motivated.
HACKER: IT WOULD HAVE BEEN A BILLION HACK IF I HAD MOVED REMAINING SHITCOINS! DID I JUST SAVE THE PROJECT? NOT SO INTERESTED IN MONEY, NOW CONSIDERING RETURNING SOME TOKENS OR JUST LEAVING THEM HERE https://t.co/DjnA7tkAbF https://t.co/rZKOxcBFpi pic.twitter.com/q5usAa0ojb
— Wu Blockchain (@WuBlockchain) August 10, 2021
Ammunition for Regulators to Target Crypto?
Recently, Gary Gensler, the head of the SEC, stated that cryptocurrency needs more safeguards on a regulatory level. He specifically mentioned decentralized finance protocols, as instead of using middlemen like central banks and exchanges, the platforms mainly bypass these intermediaries by relying on blockchains and their own cryptocurrencies.
Gensler said the SEC’s top regulator, the Securities and Exchange Commission, has to have new regulatory authority granted to it by Congress in order to supervise an ever-changing cryptocurrency industry. The SEC has taken and will continue to take our powers as far as they can, according to Gensler at the Aspen Security Forum.
The Massachusetts Institute of Technology professor and Blockchain Educator Gensler has petitioned the government to give his organization the power to regulate crypto exchanges.
He believes that many of the cryptocurrencies are behaving like traditional assets and, therefore, should come within the SEC’s jurisdiction, which has previously shown itself competent with respect to digital assets.
Although Gensler has shown his profound understanding of blockchain and cryptocurrencies, he has said that he wants to be involved in the creation of new financial technology. Capitol Hill has conducted several hearings over the last few months to find out how best to oversee a newly-found market, worth billions, in the face of sharp price fluctuations and fast development.