About two weeks ago, Cypher Protocol was attacked by an unknown bad actor, resulting in the theft of over $1 million worth of crypto. After failed attempts to reach out to the attacker, the project’s developers have decided to shift their recovery plan onto their community.
- Cypher Protocol’s recovery plan consists of two stages.
- The first stage involves a “pro rata redemption package” that allows users to withdraw some of their remaining assets on the platform.
- However, since the platform does not have enough assets to fully repay the users’ losses, the losses will be socialized among all members.
- Currently, $600k belonging to Cypher Protocol has been frozen on various exchanges, and these funds will be transferred to users.
- The second stage of the recovery plan involves an audit by OtterSec and Mad Shield, followed by an Initial DEX Offering (IDO) to raise funds for the platform’s recovery.
Hot Take
Cypher Protocol’s decision to shift the burden of their poor security onto their community is concerning. While the recovery plan aims to compensate users to some extent, it puts the responsibility on innocent members who were not responsible for the hack. Additionally, the success of the recovery plan is uncertain, as there is no guarantee that investors will be willing to fund a platform that has already suffered from security breaches. This incident highlights the importance of strong security measures in the crypto space to protect users and prevent such attacks.
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