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Ankr exploit victim group claims the company only refunded them 50%

A group calling itself “Victims of Ankr Exploit” has claimed that the Dec. 2 Ankr exploit skewed its members over 13,000 BNB liquid staking coins (worth over $4 million at the time of writing ) lost but not adequately reimbursed by Ankr. Affected members said they only received half of the lost amount, according to a Jan. 19 statement from the group obtained by Cointelegraph. The group has urged Binance’s Chanpeng Zhao (aka “CZ”) to put pressure on Ankr to release the funds.

1/4 We, the victims of the Ankr exploit, are increasing the reward from 100 BNB to 110 BNB (currently worth $28700) for the person (including influencers and media) who:

✅ helps @cz_binance understand the unfair compensation AND;
✅ makes @ankr compensate us 100% https://t.co/sZlkqGW58a

— Alex Soh (@AlexSoh14) January 7, 2023

The group specifically claimed that a reimbursement plan published by Ankr on December 20 was unfair to liquidity providers on the Wombat exchange. As part of this plan, Ankr proposed to “partially cover the loss of stkBNB liquidity providers on Wombat”. Ankr argued that a full refund would be unfair as “the nature of the mixed liquidity pools” on Wombat makes it difficult to determine how much liquidity providers have lost.

The Ankr exploit victim group admitted that Ankr compensated them with 50% of the BNB lost in the attack, but insisted they should have compensated them 100%.

The group argued that Ankr refused to fully compensate them as the lost stkBNB and BNBx liquid staking tokens were competitors to Ankr’s own ankrBNB tokens:

“It is evident that there is unjustifiable segregation and discrimination against victims. and [a] Fact that protocols affected by X only two of them (Stader and pSTAKE), direct competitors of Ankr, see their users as victims discriminated against.”

Citing a tweet from ZachXBT, they argued that Ankr was able to fully compensate them since it recovered 1,559 ETH (about $2.4 million at the time of writing) from Huobi Global after the attacker tried have to use it for payout.

Related: Uniswap is considering launching on BNB Chain

The Ankr team responded to these allegations with an email sent to Cointelegraph on Jan. 25. In the email, the Ankr representative stated that the reimbursement plan for liquidity providers on Wombat is “more than generous”. From the company’s perspective, much of the stkBNB and BNBx losses on Wombat were due to poor risk management by these competing staking protocols and illiquidity on Wombat, as they explained:

“50% of all BNBx and stkBNB liquid staking was done on Wombat alone due to Stader and pStake incentives. This presents an obvious concentration risk[…]Ankr cannot be held responsible for the lack of risk management of other pools. To put things in context, Ankr paid wombat pools a total of four times more than the aBNBc TVL we had on wombat, which is more than generous.”

The team further argued that critics of the plan failed to understand the “cash flow” that led to the loss of funds, stating:

“We need to understand what happened and follow the flow of money. The exploiter sold aBNBc on Wombat against BNB and then against BNBx and stkBNB. Then he sold BNBx and stkBNB to other DEX where there was more BNB liquidity[…]Some people made money in this story.”

The Ankr team also argued that they did not recover enough funds to compensate users, stating that “criminal investigations are ongoing to recover some of the funds and the amount we believe we can recover is significantly less than the amount we paid.”

Ankr BNB staking protocol was hacked on December 2, 2022 and the attacker was able to obtain $5 million worth of crypto through the attack. On December 21, the company announced that the attack was carried out by a former employee. In the same announcement, it pledged to strengthen its security practices and compensate victims.

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