Algorithmic market maker Wintermute hacked for $160 million

Algorithmic market-making service Wintermute suffered a security breach on Tuesday, in which hackers stole around $160 million in 90 assets in the platform’s portfolio.

Shortly expression Posted on Twitter, Wintermute founder and CEO Evgeny Gaevoy stated that “we were hacked into our defi operations for about $160 million. Cefi and OTC operations are not affected.”

While around $160 million was appropriated by the hacker Gaevoy written down that “out of 90 assets hacked, only two were notionally over $1 million (and none more than $2.5 million)” and that therefore there should not be a “big sell-off” of assets.

We got hacked in our defi operations for about $160 million. Cefi and OTC stores are not affected

— Wishful Cynic (@EvgenyGaevoy) September 20, 2022

Gaevoy assured users, lenders and partners of the platform that they “are solvent with twice the amount of equity remaining” so all affiliated companies should expect a full recovery of operations in the coming days.

Gaevoy added that Wintermute remains open to treating the hack as a “white hat” scenario, in which the hacker returns the money and receives a reward for identifying a vulnerability.

How the Wintermute hack evolved

While Gaevoy’s tweet was posted around 8:00 UTC, it appears that as early as 6:00 UTC, some Twitter users uncovered suspicious activity involving Wintermute and engaged in one debate on the pros and cons of wash trading after discovering that large amounts had been transferred from Wintermute to the 3pool exchange liquidity pool.

Following Gaevoy’s announcement, self-proclaimed on-chain detective and 2D detective ZachXBT claimed to have done so identified the hacker’s wallet address, which contains $47.8 million in their wallet, the remaining $114.3 million in the decentralized one stablecoins exchange curve protocol.

Further detection on blockchain exploration platform EtherScan reveals that the wallet in question has performed 45 transactions in the last 5 hours and has an abundance of 80 tokens in its wallet, including $12.9 million in Wrapped Bitcoin (WBTC), $3.9 million in Pax Dollars (USDP) and $2.3 million in Somnium Space CUBE tokens, among others.

Decrypt has reached out to Wintermute for comment and will update this story if the company responds.

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