KyberSwap Loses $46M in Sophisticated Hack; EU Official Hails MiCA Regulation, and US Prohibits Binance's Ex-CEO's Departure
Summary:
A "infinite money glitch" exploited by a hacker drained $46 million from the KyberSwap protocol, according to a DeFi expert. Meanwhile, the collapse of FTX in 2022 and Binance's recent $4.3 billion settlement with the U.S government underscore the importance of the EU's MiCA regulations, a European Commission official stated. In related news, U.S. prosecutors are striving to prevent former Binance CEO, Changpeng "CZ" Zhao, from leaving the country, citing him as a flight risk.
A recent scam uncovered by a DeFi industry expert revealed the KyberSwap platform was manipulated by a sophisticated "infinite money glitch" leading to a massive loss of $46 million. In separate developments, the European Union's Markets in Crypto-Assets Regulation (MiCA) has gained further legitimacy and support from recent major cryptocurrency debacles such as FTX's shocking downfall in 2022 and Binance's massive $4.3 billion settlement with the U.S government. Furthermore, U.S; prosecutors are aggressively trying to prevent ex-CEO of Binance, Changpeng "CZ" Zhao, from leaving the country, requesting a judicial order to stop his departure.
According to a deep analytical report by DeFi specialist and Ambient exchange founder Doug Colkitt, the exploitation of the "infinite money glitch" took place in KyberSwap's unique liquidity framework. The attacker successfully manipulated KyberSwap's smart contract into perceiving a higher liquidity level than what actually existed. This cunning ploy was industriously orchestrated and involved multiple stages which started with the scammer borrowing 10,000 wrapped Ether from Aave.
The aftermath of the sneaky scam landed KyberSwap a significant blow as its total value locked (TVL) plummeted by an enormous 68%, falling to a relatively low $27 million from its annual peak of $134 million.
Meanwhile, the previously collapsed FTX and the recent hefty $4.3 billion settlement by Binance with U.S. legal authorities, support the implementation of the EU’s MiCA regulations, opined one of the officers of the European Commission, Ivan Keller. In a discussion at the MoneyLIVE conference in Amsterdam, Keller stated that the high-profile Binance settlement with the U.S. Department of Justice strongly advocated the need for MiCA's widespread implementation in 2024. He mentioned the regulatory framework introduced by MiCA would mitigate associated risks and better equip authorities to supervise these entities.
In another unfolding drama, U.S. prosecutors are trying to prevent Changpeng "CZ" Zhao, ex-Binance CEO, from exiting the country citing potential flight risks. In a plea to a federal court in Seattle, they requested the court to rescind an earlier judgment which allowed Zhao to travel back to UAE on a bond of $175 million provided he returns to the U.S. two weeks before his sentencing hearing. The prosecutors mention his enormous wealth, lack of an extradition treaty between the U.S. and UAE, and his family circumstances as potential hindrances if he fails to return for his sentence hearing. Zhao had previously confessed to lax Anti-Money Laundering efforts during his tenure at Binance, a confession that led to his resignation and payment of a $50 Million fine.
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Published At
11/23/2023 7:02:30 PM
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