Crypto Hackers Surprise Authorities, Returning Majority of Funds After Heist

August 13, 2021

Decentralized finance platform Poly Network recently revealed the company was victim to one of the largest cryptocurrency heists ever recorded. As if that story itself wasn’t interesting enough, the company announced this week that most of the $600 million in digital assets have been returned to the network. This strange event has posed two significant questions: “Why would hackers bother to go through such a complex, risky task just to give the money right back? And how did they pull it off?”

While the details of the theft are still being uncovered, a few theories have been created by cybersecurity professionals that seem to make the situation less strange. Experts in the field have suggested that the heist could have been an ethical hack to purposely demonstrate the vulnerabilities of the network. According to a report by Reuters, the self-proclaimed hacker in this case has anonymously stated that this was the exact intention. This could certainly be true, but more knowledgeable resources have claimed that the reason is less well-intended.

FBI veteran and current CTO of Chainalysis Gurvais Grigg stated that ethical hackers are not known to steal in such large quantities, suspecting that the hackers returned the money simply because laundering it would be incredibly difficult to pull off. Elliptic co-founder Tom Robinson shared a similar opinion, claiming the scale of the theft likely created too many extra problems to access the funds.

"Even if you can steal cryptoassets, laundering them and cashing out is extremely difficult, due to the transparency of the blockchain and the broad use of blockchain analytics by financial institutions," commented Robinson.

How the hacker was able to pull off the attack is a much more complex matter, but the person in question has stated that the entire plan was built around the exploitation of an unspecified “bug” within the software. Analysts have found that the person was able to do this by manipulating smart contracts, which hold instructions for releasing assets during token exchanges. By altering the destinations for these transactions, the hacker was able to redirect the funds to different locations.

As of yesterday, most of the money that was stolen has been returned to Poly Network, excluding $33 million in tokens that Tether froze as a result of the attack.

Edited by Maurice Nagle

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