Defrost V1 hacker reportedly returns funds as ‘Exit Scam’ allegations surface

On Dec. 26, blockchain safety agency CertiK issued a warning alleging that Defrost Finance, a decentralized leveraged buying and selling platform on the Avalanche Blockchain, is an “Exit Rip-off.” The transfer got here simply as Defrost announced that “the hacker concerned within the V1 hack [but not the V2 hack] has returned the funds”. In supporting the choice, CertiK wrote

“On 24 December now we have seen an #exitscam on @Defrost_Finance. Now we have tried to contact a number of members of the group however have had no response. The group should not KYC’d however we’re utilizing all the data that we do have to help with authorities.”

The prior day, Defrost Finance suffered a flash mortgage assault that drained protocol customers of $12 million in belongings on its V1 and V2 protocols. Instantly after the exploit, blockchain analytics agency PeckShield additionally issued a warning alleging that the operation was a “rugpull”: 

“We acquired group intel warning the rugpull of @Defrost_Finance.Our evaluation exhibits a pretend collateral token is added and a malicious value oracle is used to liquidate present customers. The loss is estimated to be >$12M.”

In a quick autopsy evaluation, mission builders said that hackers additionally managed to steal the proprietor key for a a lot bigger assault on its V1 protocol than the flash mortgage exploit. Defrost has since offered “sharing 20% (negotiable) of the funds in change for the majority of belongings and are calling on the hackers to contact us asap.”

After posting an Ethereum (ETH) pockets deal with on its social web page, near $3 million price of digital belongings have been transferred there on the time of publication. In a Medium submit published hours later, Defrost defined that the V1 hacker had returned the stolen funds to an deal with managed by the mission builders. 

“We’ll quickly begin scanning the information on-chain to search out out who owned what previous to the hack with a view to return them to the rightful homeowners. As totally different customers had variable proportions of belongings and debt, this course of may take somewhat. Nevertheless, will probably be concluded pretty swiftly.”

CertiK’s Skynet alert for DeFrost | Supply: CertiK

It is a growing story and will probably be up to date accordingly.

Replace 15:50 Dec. 26 2022 UTC: Added info from DeFrost relating to the return of funds from the V1 attacker

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