Crypto Losses Hit $19B, Terraform Labs Shuts Down: Weekly DeFi Insights
Summary:
This week's Finance Redefined reports a rise in crypto losses due to hacks and exploits, reaching $19 billion over the past 13 years. The Solana Foundation is taking strict actions against validators involved in sandwich trading attacks. Also, Terraform Labs is turning over control to the Terra community after shutting down completely, following a $4.47 billion settlement with the SEC. Curved Finance's founder, Michael Egorov, has reportedly repaid 93% of a $10 million bad debt. The bearish trend continues in DeFi's top 100 tokens.
Welcome to our latest edition of Finance Redefined. This is your weekly source of crucial information about decentralized finance (DeFi) — a compilation carefully curated to keep you updated on the most prominent happenings from the previous week. In this week's edition, the cumulative losses from crypto cyberattacks and exploitations have surged to $19 billion over the past 13 years, with a count of 785 incidences reported, and the Solana Foundation is taking strict measures against validators behind sandwich attacks on traders. In another important development, Terraform Labs has decided to close operations completely and has handed the reins over to the Terra community following their $4.47 billion settlement with the United States Securities and Exchange Commission (SEC).
The crypto industry has sustained 785 reported cyberattacks and exploitations in the past 13 years. According to the Crystal Intelligence report, nearly $19 billion worth of digital assets have been stolen since the first recognised crypto theft was logged on June 19, 2011. The single largest incident of crypto theft remains the 2019 Plus Token scam when the perpetrators made off with $2.9 billion in Bitcoin (BTC) and Ether (ETH). In February 2024, a security breach on PlayDapp accounted for $290 million which represented the largest crypto burglary in the previous two years.
Michael Egorov, the founder of DeFi protocol Curve Finance, has reportedly repaid 93% of $10 million of bad debt resulting from a liquidation triggered earlier. Curve Finance's soft liquidation system successfully navigated a real-world test during a recent intrusion attempt; however, the chaos led to a plunge of over 28% in the CRV token price. Arkham Intelligence, a blockchain analytics firm, revealed that Egorov himself had to deal with $140 million in liquidations due to “borrowing $95.7M in stablecoins (mostly crvUSD) against $141M in CRV across five accounts on five protocols.”
In a significant announcement, Chris Amani, CEO of Terraform Labs, has revealed that the company will shut down operations following a $4.47 billion settlement with the U.S. SEC. The company intends to sell off key projects within the Terra ecosystem and handover control of the Terra blockchain to the community. Terraform Lab’s decision to wind up follows its $4.47 billion settlement with the SEC in regards to the historic crash of the algorithmic stablecoin TerraUSD (UST) in 2022. The settlement includes a significant $3.58 billion disgorgement — relinquishing ill-gotten or unethically earned profits — and a civil penalty of $420 million.
The Solana Foundation has expelled a group of validator operators from its delegation program for their involvement in sandwich attacks on traders. In a sandwich attack, an ill-intentioned trader scans a chosen network, such as Ethereum, for a pending transaction. The attack takes place by positioning one order before the transaction and another immediately after it. The attacker manipulates the asset’s price and profits from the difference by sandwiching the first pending transaction between a front-run and a back-run, both taking place at the same time.
Data from Cointelegraph Markets Pro and TradingView indicates that DeFi's top 100 tokens by the market capitalization had a bearish week, with most trading lower on the weekly charts. The total value locked in DeFi protocols reached a whopping $101 billion.
Join us for our next edition, where we will bring you more enlightening stories, insightful updates, and educative content from this continually evolving space.
Published At
6/14/2024 10:25:00 PM
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