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In a significant twist to the cryptocurrency landscape, the decentralized finance (DeFi) protocol JPEG’d has managed to recover 5,495 Ether, worth approximately $10 million, following a recent hack on Curve Finance. This remarkable resolution to the theft, which involved a bounty and quick negotiation, sheds light on the resilience and complexity of the DeFi ecosystem.
JPEG’d has emerged as a cutting-edge DeFi lending protocol allowing users to access funds against their collateralized nonfungible tokens (NFTs). In a shocking breach on July 30th, the protocol suffered a $11.6 million cryptocurrency loss due to the Curve hack.
After acknowledging the loss, the JPEG’d team promptly confirmed the return of the stolen funds in an Aug. 4th thread on platform X (formerly known as Twitter). The recovery of the funds occurred in exchange for a bounty of 610.6 ETH, valued at $1.1 million, offered to the hacker. The event was perceived as a “white-hat rescue,” effectively ending any legal actions against the responsible entity.
Late July saw the DeFi ecosystem face a staggering blow when numerous liquidity pools on Curve Finance were drained. The attacker successfully exploited a vulnerability within the Vyper smart contract programming language, resulting in total losses estimated at around $70 million in crypto.
The exploit did not only impact JPEG’d but also affected other prominent projects like decentralized exchange Ellipsis, lending platform Alchemix, and synthetic protocol Metronome. These platforms experienced the theft of millions of dollars worth of assets from their liquidity pools. Simultaneously, Curve Finance lost approximately $22 million of Curve DAO (CRV) tokens.
In an unprecedented collaborative effort, Curve, Metronome, and Alchemix announced an initiative on Aug. 3rd to retrieve the stolen funds. They offered the hacker a 10% bounty and a promise of no legal action should they return the remaining 90% of the funds.
Within 24 hours of the offer, the hacker accepted the terms and gradually returned the stolen funds to the respective projects. In addition to JPEG’d, the hackers have returned 4,820.55 Alchemix ETH (alETH), equivalent to $8.8 million, to the Alchemix Finance team, and 1 ETH ($1,829) to the Curve Finance team.
The JPEG’d and Curve Finance incident provides a fascinating insight into the vulnerabilities and strengths of the DeFi ecosystem. The swift resolution of the theft through negotiation, collaboration, and a strategic bounty offer showcases the maturity and adaptability of the industry. It also underlines the importance of robust security measures in the ever-expanding world of decentralized finance.
The post The Recovery of $10 Million in Crypto: Inside the JPEG’d and Curve Finance Incident appeared first on CryptoMode.
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