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DeFi Interoperability protocol Poly Network suffered a massive attack across Binance Binance Smart Chain (BSC), Ethereum (ETH), and Polygon. A total of $610 million worth of assets were transferred to three different addresses in the blockchains in question. This, Cryptocoin. com, it could potentially be the largest DeFi altcoin hack in history. The previous biggest crypto hack came in the form of the $530 million loss of Coincheck exchange.

https://twitter. com/PolyNetwork2/status/1425073987164381196

Theft of DeFi altcoin projects announced on Twitter

The attack came about when O3, the largest defi protocol on the cross-chain, was struggling to process $150 million worth of transactions. Wu Blockchain first reported the potential attack when the O3 protocol had problems processing hundreds of millions of dollars worth of funds. O3 protocol said:

The O3 Swap cross-chain functionality is currently suspended due to Poly Network being hacked. We are in contact with the team. Please be patient to return to full functionality. Non-cross-chain function is available and can be used normally.

https://twitter. com/WuBlockchain/status/1425073595722592266

Both Poly Network and O3 protocol suspended cross-chain functions after the attack. Poly Network has warned the exchange service about blacklisting transactions originating from hacked accounts. It also called for the hackers to return the funds while assuring them that they would take legal action.

After Poly Network’s call to blacklist the tokens, Binance CEO Changpeng Zhao said that they are making efforts to help Poly Network. Blockchain audit firm Slowmist announced that it found some information about the device that the hacker used, along with his e-mail and IP addresses.

https://twitter. com/O3_Labs/status/1425079239162744842

Major cryptocurrencies stolen include Wrapped Bitcoin (WBTC), Wrapped Ethereum (WETH), renBTC, MakerDAO (DAO), Uniswap (UNI), Shiba Inu (SHIB), USDT and USDC. Poly Network announced in a statement after the attack that “legal action will be taken” against hackers. With a total value of around $600 million, approximately $251 million of the hacking attack originated from Binance Smart Chain, $265 million from Ethereum, and $85 million from Polygon.

Can the hack spread to other protocols?

The fact that hackers use the O3 cross-chain protocol for fund transfer and Poly Network is an interoperability protocol could affect other defense projects of the hack as well. A dozen projects integrated with Poly Network may be in danger of potential loss. The increasing number of scams and hacks in DeFi projects has become a major problem despite the popularity of the ecosystem. Just last week, another DeFi project, Popsicle Finance, suffered a $25 million loss in a scam attack. There hasn’t been a month in the past year that a DeFi protocol hasn’t encountered an exploit.


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Michael Lewis

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