Alex Labs Freezes $3.9M in Crypto Theft, Proposes Network Upgrade to Protect Stolen Funds
Summary:
Layer-2 Bitcoin developer Alex Labs has seized more than $3.9 million of exploited cryptocurrency from its BNB Smart Chain bridge. In cooperation with centralized exchanges (CEXs), the team successfully traced and froze the stolen funds, which the thief had dispersed amongst various platforms. The cyber thief was also able to acquire $13.7 million worth of Stacks (STX) tokens, $9.6 million of which remains in wallets under the thief's control. Alex Labs is considering a network upgrade to freeze the remaining stolen funds and is offering a 10% reward to the thief if they return the remaining 90% of the purloined funds.
The layer-2 Bitcoin developer, Alex Labs, has managed to immobilization over $3.9 million in cryptocurrency that was maliciously taken from its BNB Smart Chain Bridge, as informed through a social media post on May 16. The cyber thief dispatched the acquired crypto to myriad centralized crypto exchanges (CEXs), facilitated by the collaboration of these entities for the freezing endeavour. The Alex Labs team revealed that it had fully regained the balances of a total of 17 distinct tokens, inclusive of "aBTC, sUSDT, xBTC, xUSD, ALEX, atALEX, LiSTX, LUNR, SKO, CHAX, $B20, ORDG, ORMM, ORNJ, TRIO, TX20 and STXS." The theft also involved $13.7 million in Stacks (STX) tokens. The miscreant committed an error by sending "about 3 million" to centralized exchanges. A linked spreadsheet in the post lists the STX balances at each exchange used by the offender to transfer the funds. Of the full $13.7 million, $3.7 million resides on exchanges and the balance of $9.6 million is safely stored in wallets controlled by the offender. The thief successfully drew out the funds by gaining control of a special key providing access to one of the bridge's "vaults." But, the team reassuringly confirmed that "The smart contract code and infrastructure underlying ALEX were not compromised." The entity has offered a 10% reward to the offender, coupled with assurance of no legal action if the remaining 90% of the illicit funds are returned. Alex Labs is also ready with a police complaint that will be filed if the offender isn't willing to negotiate. Due to the possibility of not retrieving all the stolen funds, the team is currently "evaluating deployment of $ALEX reserves held by ALEX Lab Foundation," for a "treasury grant program" to cover the losses for the affected users. A significant portion of the stolen funds is made up of STX tokens, so the team also aims to propose a Stacks network upgrade that will immobilize the remaining funds and generate new tokens for the victims. Similar network upgrades for freezing illicitly gained digital currencies isn't a new concept, as witnessed during the 2016 Ethereum DAO hack and the more recent PopcornSwap scenario with the BNB Smart Chain, though such changes seldom see approval. In the PopcornSwap incident, the upgrade managed to freeze the funds but didn't compensate the affected investors. Alex Labs assures that it is actively tracking the offender's addresses with "multiple alarms" to prevent any further movement of pilfered funds. It is not just Alex that fell victim to such a violation, but on May 17, the XLink bridge also saw an attack resulting in a loss of $10 million. However, a benevolent hacker managed to retrieve $4.3 million of the purloined funds in the XLink invasion. Both violations bore striking similarities with each involving a phishing technique helping the felon gain the team's private key used for unauthorized withdrawals.
Published At
5/18/2024 12:04:31 AM
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