Crypto platform Wormhole hit by $320 million hack

FILE PHOTO: Representations of the virtual currency Bitcoin stand on a motherboard in this illustration taken May 20, 2021. REUTERS/Dado Ruvic/File Photo

Hackers have stolen cryptocurrency worth over $320 million from a decentralized finance platform, the fourth-largest crypto heist on record and the latest to shake up the fast-growing DeFi sector.

Wormhole, a site that allows the transfer of information from one crypto network to another, said on Twitter on Wednesday that it was “mined” for 120,000 units of a version of the second-largest cryptocurrency, l ‘ether.

Wormhole did not immediately respond to a Reuters request for comment.

London-based blockchain analytics firm Elliptic said the attackers were able to fraudulently create the wETH tokens, nearly 94,000 of which were then transferred to the Ethereum blockchain, which powers transactions for Ether.

Wormhole said in another tweet early Thursday that he had fixed the vulnerability in his system but was still working to restore the network.

So-called DeFi platforms allow users to lend, borrow and save – usually in cryptocurrencies – while bypassing traditional financial gatekeepers such as banks.

Money has been pouring into DeFi sites, reflecting the explosion of interest in cryptocurrencies as a whole. Many investors, faced with historically low or sub-zero interest rates, are drawn to DeFi by the promise of high returns on savings.

Yet with their meteoric growth, DeFi platforms have become a major hacking risk, with bugs in code and design flaws allowing criminals to target DeFi sites and deep reservoirs of liquidity, and also launder the proceeds of crime, while leaving few traces.

Fraud and theft on DeFi platforms topped $10 billion last year, research showed Thursday, laying bare the risks in the rapidly growing but mostly unregulated cryptocurrency space.

In August, the hackers behind the largest ever digital coin heist returned nearly all of the $610 million+ they stole from the DeFi site Poly Network.

Hacks have long plagued crypto platforms. In 2018, digital tokens worth around $530 million were stolen from the Tokyo-based platform Coincheck. Mt. Gox, another Japanese exchange, collapsed in 2014 after hackers stole half a billion dollars worth of crypto.

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