Earlier this month, Euler Finance, a decentralized finance (DeFi) protocol, fell victim to a $200 million exploit. However, in a surprising turn of events, the hacker responsible for the attack decided to return a majority of the stolen funds to the protocol.
Etherscan, a blockchain explorer, recorded the transaction that showed the hacker sending back over 51,000 ether, which is valued at nearly $90 million, to the Euler deployer contract. This significant return of funds had a positive impact on the market. Traders responded favorably, and as a result, the price of Euler Finance’s native token, EUL, experienced a significant boost, rising 25% in just 24 hours.
It’s worth noting that such instances of hackers returning stolen funds are not common. The motives behind returning funds in this case remain unclear. However, it does highlight the unpredictable nature of the cryptocurrency and DeFi space, emphasizing the importance of strong security measures and risk mitigation strategies for projects in this sector.
A week ago, Euler Finance offered a $1 million bounty to the hacker who had stolen close to $200 million in various digital assets, including dai (DAI), wrapped bitcoin (wBTC), staked ether (sETH), and USD coin (USDC) from its lending protocol. At the time of the bounty offer, the developers requested the return of 90% of the stolen funds.
To execute the attack, the hacker exploited a flash loan, which allowed them to manipulate the protocol into falsely thinking it held different quantities of eToken and dToken. By taking advantage of this vulnerability, the attacker was able to steal a substantial amount of digital assets from the protocol.
Previously, Euler Finance attempted to negotiate with the attacker, asking them to return 90% of the stolen funds within 24 hours or face legal consequences. However, no response was received. After the 24-hour deadline passed, Euler offered a $1 bounty reward for any information that could help identify and apprehend the exploiter.
The hacker has since conducted additional transactions, including transferring 1,000 nETH, worth approximately $1.65 million at the time, through the regulated crypto mixing service, Tornado Cash.
Blockchain analytics firm PeckShield reported that around 100 ETH was sent to a wallet address believed to belong to one of the victims. Prior to this transaction, an on-chain message from the wallet address had implored the attacker to return the funds, which the victim claimed were their “life savings.”
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