Blockchain analytics company PeckShield has observed significant movement from the wallet address associated with the KyberSwap attacker. The hacker, responsible for the exploit on decentralized exchange KyberSwap, has transferred approximately $2.5 million worth of digital assets from Arbitrum to the Ethereum network.
Background of the KyberSwap attack
The attacker bridged 798.8 Ether (ETH), valued at $3,161 each, totaling nearly $2.5 million, from Arbitrum to Ethereum. Additionally, the hacker moved approximately $826,500 worth of Dai (DAI) stablecoin to another wallet.
This development follows the KyberSwap attack, which was one of the largest hacks in 2023. Initially, around $46 million in digital assets were reported stolen, but this figure was later revised to almost $49 million.
The KyberSwap security breach prompted the DEX to notify its community and advise users to withdraw their funds.
The hacker left an on-chain message for the KyberSwap team, suggesting that negotiations would begin after sufficient rest. Initially, a $4.6 million bounty was offered in exchange for returning 90% of the stolen funds. However, negotiations deteriorated when the hacker expressed dissatisfaction with KyberSwap’s approach.
Hacker’s ultimatum, KyberSwap’s response, and fallout
The situation escalated when the hacker demanded total control over KyberSwap and its assets, including temporary full authority and ownership over KyberDAO, the governance mechanism for Kyber. A deadline was set, threatening consequences if the demands were not met. In response, KyberSwap initiated treasury grants for hack victims.
The incident also affected the company, leading to a significant reduction in its workforce one month after the exploit.
Implications of the stolen fund transfer
The movement of stolen funds from Arbitrum to Ethereum highlights the ongoing challenges faced by decentralized exchanges in protecting user assets. Despite efforts to negotiate with the hacker, the resolution for KyberSwap remains uncertain.
This incident emphasizes the importance of robust security measures and proactive response strategies within the decentralized finance (DeFi) space.
The recent transfer of stolen funds by the KyberSwap hacker to Ethereum indicates the continuation of the aftermath of one of the largest hacks. With millions of dollars worth of digital assets being moved across blockchains, this incident underscores the need for enhanced security measures and proactive response strategies within the decentralized finance sector.
As the negotiations between KyberSwap and the attacker remain unresolved, the broader implications on DeFi security and governance mechanisms continue to be a cause for concern.
