3 - 5 minute read
Decentralized Finance (DeFi) is a revolutionary financial system that allows individuals to transact directly with each other without intermediaries. It has grown in popularity in recent years, but it has also become a target for hackers. One such attack occurred on March 13th, 2021, when Euler Finance, a decentralized lending project, suffered a flash loan-enabled attack that resulted in a loss of $197 million worth of crypto assets. However, the individual who hacked and pilfered Euler Finance has returned the remaining sum of $31 million, marking a successful end to recovery efforts.
At approximately 6:55 pm EST on Monday, the attacker sent back $31 million through three transactions, comprising 10,580 ETH ($19 million) and $12 million in DAI. This brought the total value of the returned funds to over $177 million, accounting for 90% of the expected recoverable funds from the hack, after adjusting for the 10% bounty previously offered by the project, according to the Euler Finance team.
Euler Labs, the developer behind the affected project, confirmed the successful recovery in a recent Twitter post, stating: “Following successful negotiations, all of the recoverable funds taken from the Euler protocol on March 13th have now been successfully returned by the exploiter.”
The return of these funds marks a rare instance of positive resolution in the DeFi space, where large-scale hacks have become increasingly common. Despite initial doubts when the hacker laundered $1.8 million through the crypto mixer Tornado Cash three days after the attack, the recovery process began on March 18th with the return of $5.4 million to Euler. Over the following days, the hacker continued to return funds at variable intervals, returning the most-significant tranche of $102 million in ETH.
On March 28th, the hacker sent a series of on-chain messages to their address, using the input data to share messages with the public. In these messages, the attacker said they were “sorry” and promised to return the remaining funds as soon as possible.
This successful recovery effort highlights the importance of transparency and cooperation in the DeFi space. It also sends a message to would-be hackers that their actions will not be tolerated and that there are consequences for their actions.
However, this incident also underscores the risks associated with investing in DeFi projects. These projects are still in their infancy, and the lack of regulation and oversight means that there is a higher risk of hacks and exploits. Therefore, investors should exercise caution when investing in DeFi projects and only invest what they can afford to lose.
The successful recovery of the stolen funds from Euler Finance is a positive development for the DeFi space. It shows that recovery is possible, and that cooperation between the affected parties is crucial in achieving a positive outcome. However, investors should still exercise caution when investing in DeFi projects and only invest what they can afford to lose. Trading carries a high risk, and we are not financial advisors.