March 27, 2024
Hacker Returns Over $5 Million to Seneca Stablecoin Protocol After Exploiting $6.4M Bug
Altcoins News

Hacker Returns Over $5 Million to Seneca Stablecoin Protocol After Exploiting $6.4M Bug

The Seneca stablecoin protocol was recently rocked by a significant security breach, with a hacker making off with approximately $6.4 million in ETH. However, in an unexpected turn of events, the hacker has returned over $5 million to the project after accepting a 20% bounty offered by the Seneca team.

Source: CertiK

The exploit, which involved a flaw in the protocol’s smart contract approval mechanism, allowed the attacker to siphon off digital assets. Blockchain security firms, including CertiK, were quick to flag the exploit on February 28, prompting urgent warnings to users to revoke approvals on the Ethereum and Arbitrum networks.

Initially estimated at $3 million, the scope of the breach widened as it became evident that over 1,900 Ether, valued at around $6.4 million, had been taken. CertiK’s security analysts attributed the exploit to a critical vulnerability in the smart contract, enabling unauthorized external calls.

One glaring issue exacerbated the situation: the absence of a code allowing the Seneca team to pause the project’s contracts. Consequently, users were left with no choice but to revoke permissions manually.

In response to the breach, Seneca took proactive measures, offering a $1.2 million bounty for the return of the stolen funds. In an unprecedented move, the team appealed directly to the hacker through an on-chain message, urging them to return 80% of the funds to an Ethereum address while allowing the hacker to retain 20%.

Emphasizing the urgency of the situation, the Seneca team underscored their collaboration with security providers and law enforcement to trace the funds, warning of potential legal consequences if the funds were not returned promptly.

In a remarkable development, the hacker complied with the Seneca team’s request, returning approximately 1,537 ETH, equivalent to over $5.3 million, to the specified wallet address. However, the hacker opted to retain 300 ETH, valued at around $1 million, thereby accepting the 20% bounty offered.

The subsequent transfer of the retained ETH to different addresses marked the conclusion of a saga that highlighted both the vulnerabilities inherent in DeFi protocols and the potential for cooperation between hackers and affected projects. As Seneca continues its investigation, the incident serves as a stark reminder of the ongoing challenges in safeguarding digital assets within the rapidly evolving landscape of decentralized finance.

Image by Shafin Al Asad Protic from Pixabay

Related posts

Concordia Protocol Raises $4 Million in Seed Funding to Streamline Decentralized Finance

Eva Moore

AVAX Surges; Rebel Satoshi’s $RBLZ Presale Soars

Kevin Wilson

Avalanche Launches $1M Memecoin Incentive Program

Cheryl  Lee

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More