French police arrest hackers allegedly linked to exploiting Avalanche-based DeFi protocol
French National Police have arrested two people allegedly behind the $9.19 million hack of the Avalanche (AVAX)-based decentralized finance (DeFi) protocol Platypus Finance.
French police also announced that they had seized €210,000 ($222,505) worth of cryptocurrencies.
Platypus himself also confirms the development.
Platypus, an automated market maker for stableswap, suffered three separate attacks on February 16th. The first attack was the largest, facilitating the theft of $8.5 million worth of stablecoins.
Platypus says in an announcement that it managed to freeze $1.5 million worth of stolen Tether (USDT). The project was also able to use the existing code in the attack contract and retrieve 2.4 million USDC with the help of blockchain security infrastructure company BlockSec.
Tell Platypus of the attack,
“Our investigation determined that the flaw responsible for the attack was a logic flaw in the USP solvency check mechanism within the Collateral Holding Agreement.”
The protocol’s stablecoin, Platypus USD (USP), which only launched last December, lost its desired peg in the wake of the attack and is trading as low as $0.339 at the time of writing.
Platypus also says it has a plan to compensate impacted liquidity pools (LPs).
“After the attack, around 35.4% of the funds remained in the main pool. The surplus we kept in the main pool is fully used to compensate the affected LPs for their loss. As we have recovered 2.4 million USDC (17.7% of pre-attack assets) from the attack contract, approximately 53.1% of the pool funds will be returned to all impacted LPs. We are currently discussing with various parties to help recover stablecoins trapped in the attack treaty. Once stablecoins are mined, we will prorate the Remint tokens to LPs.”
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