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08.11.21

More than $600 million in cryptocurrency stolen in a record setting hack

BY Andrew L. Share

Poly Network, a decentralized finance (DeFi) platform connecting various blockchains (and some of the most widely used, such as Binance Smart Chain, Ethereum, and Polygon blockchains), disclosed late yesterday that it was hacked and that more than $600 million in cryptocurrencies was stolen as a result. The theft, thought to be the biggest in cryptocurrency history, left Ploy Network begging the hackers to return the stolen assets in a post provided on Poly Network’s Twitter account.

Poly Network urged cryptocurrency exchanges to “blacklist tokens” coming from the addresses that were linked to the hackers. As a result, various cyrptocurrency exchanges have undertaken efforts to track the various transfers of the stolen coins that have occurred following the theft in order to try to determine the identity of those involved.

Year to date, over 75% of reported hacks involving cryptocurrencies have involved DeFi platforms, according to a study by crypto intelligence firm CipherTrace. Before yesterday’s theft, that amounted to approximately $361 million in stolen cryptocurrency in 2021. While DeFi platforms continue to work to disrupt traditional financial models and intermediaries, yesterday’s and prior hacks continue to highlight the technology risks in addition to more traditional market and credit risks typically realized in financial markets.

Update: Hackers returning stolen crypto?

In a stunning turn of events, the hacker, who just days ago stole more than $600 million in cryptocurrencies, has returned a portion of the stolen coins following a pledge from various crypto experts to track the hacker’s crypto wallet on the blockchain to help identify the hacker and retrieve the assets.  As of Wednesday evening, the hacker had returned approximately $258 million but it is unclear what the fate of the remaining stolen funds will be. 

Presumably, the return of the funds shows that, notwithstanding any ability for a hacker to impermissibly access and steal cryptocurrencies, the transparency of blockchain ledgers makes it difficult to hide and launder the assets once stolen.

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Andrew L. Share

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