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Poly Network Hack: $610 Million Stolen, Most Funds Returned by Attacker
On August 10, 2021, Poly Network, a cross-chain interoperability protocol, experienced the largest theft in decentralized finance history, with approximately $610 million siphoned from its accounts. The attacker exploited a vulnerability in the protocol's smart contracts, allowing them to drain funds across three blockchains: Ethereum, Binance Smart Chain, and Polygon.
In an unexpected turn of events, the hacker, later referred to as 'Mr. White Hat', began returning the stolen funds within 24 hours. By August 12, Poly Network confirmed the recovery of $342 million, which included $252 million from Binance Smart Chain, $85 million from Polygon, and $4.6 million from Ethereum. The hacker communicated their motives through on-chain messages, asserting that their actions were intended to expose a critical vulnerability rather than to permanently retain the stolen assets.
By late August 2021, Poly Network had regained control of nearly all the stolen assets, totaling approximately 28,953 ETH and 1,032 WBTC. However, $33 million in Tether remained unrecovered, as the issuer had frozen those tokens shortly after the hack was discovered. This incident highlighted the limitations of decentralization in certain crypto assets, as Tether's ability to freeze funds contradicted the assumption of complete censorship resistance.
The Poly Network hack prompted significant discussions within the decentralized finance community regarding crisis response and security measures. The protocol's cooperative approach with the hacker, rather than pursuing legal action, facilitated the return of funds and led to an increase in bug bounty programs across the industry, with many protocols now offering substantial rewards for the disclosure of critical vulnerabilities.
Source: KLEA News