The crypto landscape has seen its fair share of corruption in recent months, with cybersecurity breaches skyrocketing and thefts becoming more rampant. But none has been as wide-reaching as the latest attack which saw the South Korean exchange GDAC lose almost $13 million in digital assets. Adding to the woes is the Euler Finance saga which recently confronted a flash loan attack resulting in the loss of nearly $200 million.
The GDAC hack occurred on April 9 and saw the attackers making away with 60 BTC, 350.5 ETH, 10,000,000 WEMIX tokens and 220,000 USDT. Altogether, the total value of lost assets amounted to approximately $13 million, making up 23% of the platform’s total custodial assets.
Recognizing the extent of the damage, GDAC swiftly took the measures necessary and blocked the wallet network as well as related servers. Reports were made to the internet security and financial intelligence agencies and GDAC requested them to launch an investigation into the matter. Moreover, they asked the DeFi managers and other exchanges to help in the resolution of the issue.
The Euler Finance hacking saga was a little different. Starting with a flash loan attack, the perpetrators managed to strip $200 million worth of digital assets from the decentralized finance protocol. Euler Finance offered them to keep $20 million with themselves in exchange for the return of the rest of the funds. However, the wrongdoer refused to couple with this agreement and instead broke it up and sent the assets to Tornado Cash, a privacy coin.
This story takes a happy turn with the wrongdoer changing their stance at the end of March, sending back more than $100 million worth of ETH to Euler Finance. Even more astounding is, that these hackers apologized and returned even more of their stolen stash in the following days. The entire ordeal was brought to an end at the end of last week when the perpetrator sent back all recoverable assets after successful negotiations with Euler Finance.
In the last 15 to 18 months, the world of cryptocurrency has seen a huge surge in the number of security breaches with North Korean hackers being among the most active. Among the most prominent was the Ronald bridge in Axie Infinity which was hacked for $625 million last year. Then there was the $3.3 million exploit at Sushi on Sunday.
This is where an exchange’s hot wallet comes into play. Exchange hot wallets are used to store a portion of available funds for immediate withdrawal and trading activities, but come with a higher security risk compared to offline-based wallets, as the hot wallets are connected to the internet.
GDAC CEO Seunghwan Han said in a statement that in response to the incident, the company is collaborating with both domestic and foreign-based crypto exchanges and token issuers to prevent the stolen coins from being laundered and to recover them.
At the end of the day, GDAC and Euler Finance’s struggles are indicative of the overall state of the cryptocurrency industry. With authorities, crypto protocol developers, exchanges, and wallet providers across the world increasingly emphasizing the importance of cryptographic security, the exchanges need to ensure that adequate measures are taken to counter the ever-growing threat of hacks. The number of losses incurred might affect the investors and the platforms, but only if they are able to raise the awareness level and counteract the security breaches can these projects survive.
