Superposition's Alex Hoffman Reveals He Was Behind Hacked DeFi's Nirvana Finance
Summary:
Alex Hoffman, head of ecosystem at Superposition, reveals that he was the anonymous founder of Nirvana Finance, a Decentralized Finance (DeFi) protocol that suffered a $3.5 million flash loan attack. Following a 17-month investigation, software engineer Shakeeb Ahmed was arrested and sentenced for the hack. The incident has brought significant stress to Hoffman, who had previously remained anonymous and now faced threats after the hack occurred. Currently, despite being insolvent, Nirvana Finance is developing recovery plans.
Previously undisclosed, Alex Hoffman, Superposition's executive leading the ecosystem, was the clandestine originator of the yield protocol Nirvana Finance in decentralized finance (DeFi) sector. This system suffered a $3.5 million flash loan attack a couple of years back. Presently, Hoffman comfortably associates himself with the covert founder's character and narrates the tale of his life's worst day: a morning he woke up to find Nirvana Finance funds suddenly missing. He shared this painful story during a private conversation with Cointelegraph, further remembering that the attack took place just before the audit commencement week. The pursuit of Nirvana Finance's perpetrator continued for over a year.
In December 2023, after unstinting investigation efforts by blockchain sleuths and multiple law enforcement departments, software programmer Shakeeb Ahmed was taken into custody upon confessing to the Nirvana Finance breach. On April 12, he got a prison term of three years.
Ahmed's tactics were sophisticated, making it difficult for investigators to find any leads; in fact, they mostly found dead ends. This continued until a turning point in the case: an unexpected Telegram message from a Homeland Security officer who had a strong lead, believing it was the work of the cryptanalyst responsible for another recent breach.
For months, earnest back-and-forth communication took place between Hoffman, the officer, prosecutors, and IRS investigators. After thoroughly cross-referencing transactions and comprehending Nirvana Finance's protocol structure, the authorities were finally able to trace the breach back to Ahmed.
Having identified the flaw in the code by trialing the system, Ahmed took advantage of it, even though Nirvana Finance wasn't open source. The breach period was highly stressful for Hoffman, causing him not only to lose a significant portion of his assets, which were largely invested in the supposedly foolproof protocol, but also to worry that the defrauded victims, unaware of the founder's identity, would assume he had exploited them.
Hoffman thought about revealing his identity to explain his non-involvement in the breach but feared increased threats via Nirvana Finance's Twitter. Ultimately, his fear proved to be accurate, and he received death threats targeted at him and his family.
Further discussing the lifecycle of the protocol, Hoffman was amazed at how quickly it was adopted, gaining attention from major Chinese news outlets and obtaining approximately 25 million TVL within its initial week.
The fast expansion drew Solana's interest, with its CEO, Anatoly Yakovenko, personally suggesting a security audit on the protocol. Despite Hoffman's ongoing attempts to organize an audit, this proved difficult due to the top audit firms being highly sought after. Eventually, Yakovenko managed to expediate the process.
Currently, while Nirvana Finance remains bankrupt, it is highly cautioned to avoid its proprietary token Nirvana (NIRV) trading as per the Nirvana Finance website, and a recovery process is being executed.
Published At
6/3/2024 6:42:51 AM
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