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Hackers return $260 million to cryptocurrency platform after massive theft

3 mins read

London (Reuters) – Hackers behind one of the biggest ever cryptocurrency heists have returned more than a third of about $600 million in digital coins they stole, blockchain researchers said on Wednesday.

Poly Network, a decentralised finance platform that facilitates peer-to-peer transactions, announced the hack on Twitter here, posting details of digital wallets to which the tokens were sent.

The value of the coins in the wallets was just over $600 million at the time of the announcement, according to blockchain analysts.

Poly Network, which allows users to swap tokens across different blockchains, later urged the hackers to return the stolen funds to several of its digital addresses, saying it planned to take legal action.

Roughly $260 million worth of cryptocurrency has been returned to Poly Network in a range of coins, according to separate analyses by blockchain forensics company Chainalysis and crypto tracking firm Elliptic.

The hackers exploited a vulnerability in the digital contracts Poly Network uses to move assets between different blockchains, according to Chainalysis.

A person claiming to have perpetrated the hack said they did it “for fun” and wanted to “expose the vulnerability” before others could exploit it, according to digital messages shared by Elliptic and Chainalysis.

It was “always the plan” to return the tokens, the purported hacker wrote, adding: “I am not very interested in money.”

The hackers or hacker have not been identified, and Reuters could not verify the authenticity of the messages.

Tom Robinson, Elliptic’s co-founder, said the decision to return the money could have been prompted by the headaches of laundering stolen crypto on such a scale.

An executive from cryptocurrency firm Tether said on Twitter the company had frozen $33 million connected with the hack, and executives at other crypto exchanges told Poly Network they would also try to help.

“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,” said Robinson.

Poly Network did not respond to requests for more details. It was not immediately clear where the platform is based, or whether any law enforcement agency was investigating the heist.

Spokespeople for the Department of Justice and the Commodity Futures Trading Commission did not immediately respond to requests for comment.

The size of the theft was comparable to the $530 million in digital coins stolen from Tokyo-based exchange Coincheck in 2018. The Mt. Gox exchange, also based in Tokyo, collapsed in 2014 after losing half a billion dollars in bitcoin.

The Poly Network attack comes as losses from theft, hacks and fraud related to decentralised finance (DeFi) hit an all-time high, according to crypto intelligence company CipherTrace.

At $600 million, however, the Poly Network theft far outstripped the $474 million in criminal losses CipherTrace said were registered by the entire DeFi sector from January to July. The thefts illustrated risks of the mostly unregulated sector and may attract the attention of regulators.

DeFi platforms allow parties to conduct transactions, usually in cryptocurrency, directly without traditional gatekeepers such as banks or exchanges. The sector has boomed over the last year, with platforms now handling more than $80 billion worth of digital coins.

Proponents of DeFi say it offers people and businesses free access to financial services, arguing that the technology will cut costs and boost economic activity. But technical flaws and weaknesses in their computer code can make them vulnerable to hacks.