Cypher Protocol Successfully Freezes Stolen Cryptocurrencies Valued at $600,000
Cypher Protocol has identified and frozen stolen cryptocurrencies worth $600,000 following an exploitation incident. The decentralized exchange collaborated with independent investigators to achieve this feat after the hacker refused to return the funds. The return of the frozen funds depends on the cooperation of centralized exchanges and the issuance of seizure warrants by law enforcement.
Assets Frozen and Compensation Plans
- USDT, SOL, wETH, and other altcoins were among the frozen assets.
- Cypher Protocol intends to compensate users for these assets, even if on a limited scale.
- The exchange initially offered a 10% white hat bounty to the hackers, but they failed to meet the deadline for returning the funds.
- Individuals have an opportunity to retrieve the lost funds and receive a reward from Cypher Protocol.
Cypher Implements Socialized Losses Policy
In response to the exploit, Cypher adopted a socializing losses mechanism to distribute the impact more evenly among users. The redemption process was based on a pro-rata basis, ensuring a fair distribution of assets. The program was audited and open-sourced to uphold transparency and security.
About the Exploit
In the security incident, Cypher’s smart contract was frozen after a wallet associated with the exploit stole approximately 38,530 Solana tokens and $123,184 worth of USD Coin. The exploit exposed vulnerabilities in the platform’s monitoring and margin check systems.
Hot Take
Cypher Protocol’s successful freezing of stolen cryptocurrencies showcases its commitment to user protection and fairness. The implementation of a socialized losses policy demonstrates its dedication to achieving a balanced outcome for all participants affected by the exploit. However, the increasing number of such incidents in the crypto space raises questions about the resilience of cryptocurrency giants and their ability to retain user confidence.