A cyberattack by DeFi cost Prisma Finance $11.6 million. The hacker promises a “whitehat rescue” and may give back the funds.
A substantial vulnerability in the Prisma Finance decentralized finance (DeFi) protocol led to the theft of almost $11.6 million in cryptocurrency. When it happened on March 28, the vulnerability sent shockwaves across the DeFi community and made some wonder whether these platforms are really secure.
The exploit’s author took an unexpected step after the assault by contacting Prisma Finance, calling it a “whitehat rescue” and offering to repay the money. Instead of exploiting security vulnerabilities for personal benefit, “whitehat rescue” refers to ethical hacking tactics that include finding and reporting them to the affected party. Prisma Finance may have been hinting at a desire to negotiate with the hacker when they replied with negotiating contact details.
Incidents of exploitation and the ensuing discussions for the restoration of funds are prevalent in the digital currency sector. Ethical hackers may reveal security flaws and give back the money they received without expecting anything in return, whereas malicious hackers may exploit vulnerabilities and ask for rewards in return for protection. This dynamic highlights how complicated cybersecurity is in the ever-changing crypto world.
Prisma Finance was the victim of the hack, which stole almost $11.6 million worth of cryptocurrency. The quick transfers of the stolen funds to several locations made it more difficult to track them down and retrieve them. In later deals, the stolen money was exchanged for Ether (ETH), and some of it ended up in Tornado Cash, a cryptocurrency mixer that is not allowed by OFAC.
Quickly after discovering the vulnerability, the experts at Prisma Finance disabled the DeFi protocol to block any more fraudulent transactions. Nevertheless, the occurrence resulted in substantial consequences, including a substantial decrease in the total value locked (TVL) of the platform. After the hack, Prisma Finance’s TVL fell to $115 million from $220 million before the vulnerability.
Prisma Finance’s theft is only the latest in a number of frauds and hacks involving cryptocurrencies that have hit the DeFi sector hard in the last few months. In only the first two months of 2024, security company Immunefi reported that 32 instances occurred, resulting in the loss of nearly $200 million worth of cryptocurrency. This pattern highlights the persistent difficulties that DeFi platforms have when it comes to protecting user funds and preserving community confidence.
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