KyberSwap Cyber Assault: Hacker Transfers Millions as Company Struggles Post-Hack
Summary:
The cybercriminal behind the 2023 KyberSwap hack has been detected transferring around $3.5 million in digital assets across blockchains. Initially, losses from the attack were estimated at $46 million but later identified as nearly $49 million. Following the incident, the attacker demanded full control over KyberSwap, leading to offers of a bounty and treasury grants for hack victims. The breach severely impacted the company, causing a workforce reduction by half.
The individual responsible for the cyber assault on the peer-to-peer exchange, KyberSwap, has been tracked initiating the transfer of millions in cryptocurrencies across various blockchains. On the 26th of February, PeckShield, a blockchain forensics company, detected activity originating from the cyber-attacker's digital wallet linked to KyberSwap. It was reported that the cybercriminal (hacker) ported 798.8 of Ether (ETH), an equivalent of close to $2.5 million, from the Arbitrum network onto Ethereum's blockchain.
In addition to the $2.5 million, the perpetrator also shifted nearly a million dollars worth of stablecoins. An exploiter-associated wallet was recorded transferring $826,500 of the stablecoin DAI (DAI) to another wallet. Information on these transactions was revealed by PeckShield. The attack on KyberSwap ranks amongst the heaviest of security breaches in 2023.
On November 23, the decentralized exchange informed its users of a "security breach" and recommended that they withdraw their funds. The initial estimate of the financial loss from the fraudulent operation was around $46 million in valued digital currencies. However, subsequent investigations revealed that the actual amount was closer to $49 million. The cybercriminal relayed an on-chain message to the KyberSwap team on the day of the incident, stating that talks would commence once they've "fully recuperated."
In an attempt to recover most of the pilfered funds, the KyberSwap team proposed a reward of $4.6 million to the cyber attacker in return for 90% of the stolen assets. However, the bounty discussions took a negative turn when the hacker began expressing their resentment toward KyberSwap’s tactic. On November 29, the hacker conveyed another on-chain warning, cautioning the KyberSwap team of further delay in negotiations due to the team's legal threats and an attitude the hacker perceived as "hostility."
In a surprising turn of events, the cybercriminal demanded total control of the KyberSwap enterprise and all its holdings. This demand included temporary full control and ownership of KyberDAO, the governance mechanism for Kyber, and all relevant documents. The entity gave KyberSwap until December 10 to make a decision, after which he warned the "agreement will be invalidated."
Following these demands, the KyberSwap team chose to allocate treasury grants to the hack victims. On December 2, the team announced that it would provide a grant to those who lost assets due to the fraudulent activities and are yet to recuperate them. The hack also significantly affected the organization, resulting in a workforce reduction by half within a month of the security breach.
Published At
2/26/2024 2:02:15 PM
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