On March 16, Euler Finance, a decentralized finance (DeFi) protocol, announced that it had been the victim of a massive hack in which a total of $197 million was stolen. This was quickly dubbed the biggest DeFi hack of 2023 so far and it sent shockwaves through the crypto community.
The hacker was able to drain the funds through a series of multiple transactions and then used a multi-chain bridge to transfer the stolen funds from the Binance Smart Chain to Ethereum. The hacker then moved the stolen funds to the Tornado Cash crypto mixer, making it difficult to track the funds.
However, on March 18, there was a surprising development when the hacker reportedly returned around $5.4 million worth of Ether to the address of the Euler Finance implementer. The funds were sent in three transactions and it is unclear why the hacker decided to return the funds.
This is not the first time a hacker has returned stolen funds after a high-profile attack. In 2016, the hacker who stole $55 million from the DAO returned the stolen funds, citing a “bug” in the code. The hacker behind the Euler Finance hack may have changed his mind, or was pressured to return the funds after Euler Finance announced a $1 million reward for information on the hacker’s identity.
Euler Finance has demanded that the hacker return 90% of the stolen funds within 24 hours to avoid potential jail time. It remains to be seen if the hacker will comply with this demand or if the rest of the stolen funds will be returned.
Euler Finance hack highlights ongoing security risks in the DeFi space. DeFi protocols are designed to be open and transparent, but this also makes them vulnerable to attack. It is important that DeFi protocols take measures to improve their security, such as conducting regular audits and implementing multi-factor authentication for user accounts. Only then can DeFi protocols earn the trust of users and investors alike.
