On March 16, Euler Finance, a decentralized finance (DeFi) protocol, announced that it had been the victim of a substantial hack in which a total of $197 Million was stolen. This was quickly dubbed the largest Decentralized Finance hack of 2023 so far and sent shockwaves through the cryptocurrency community.
The hacker was able to drain the funds through a series of numerous transactions, and then used a multichain bridge to transfer the stolen funds from the Binance Crypto exchange Smart Chain to Ethereum (ETH). The hacker then moved the stolen funds into the cryptocurrency mixer Tornado Cash, making it difficult to track the funds.
Nonetheless, on March 18, there was a surprising development when the hacker reportedly returned around $5.4 Million in Ether to Euler Finance’s deployer address. The funds were sent in 3 transactions, and it is not clear why the hacker decided to return the funds.
This is not the 1st time that a hacker has returned stolen funds after a high-profile hack. In 2016, the hacker who stole $55 Million from the DAO returned the stolen funds, citing a “bug” in the code. It is possible that the hacker behind the Euler Finance hack had a change of heart, or was pressured to return the funds after Euler Finance announced a $1 Million reward for information on the hacker’s identity.
Euler Finance has demanded that the hacker return 90 percent of the stolen funds within 24 hours to avoid possible jail time. It remains to be seen whether the hacker will comply with this demand, or whether the rest of the stolen funds will be returned.
The Euler Finance hack outlines the ongoing security dangers in the Decentralized Finance space. protocols of Decentralized Finance are designed to be open and transparent, but this likewise makes them vulnerable to attacks. It is important for protocols of Decentralized Finance to take measures to make better their security, such as performing regular audits and implementing multi-factor authentication for user accounts. Only by doing so can protocols of Decentralized Finance gain the trust of users and investors alike.