Decentralized finance (DeFi) protocol Platypus Finance said it recovered 90% of assets stolen in a security breach last week.
According to the October 17 announcement, the protocol’s net loss was capped at 18,000 AVAX (AVAX), worth $167,400, at the time of publication. Since the hacker voluntarily returned the funds, Platypus Finance stated that it “guarantees that no legal action will be taken.” It was also hinted that withdrawal information on users’ assets will be released soon.
On October 12, the automated market maker running on the Avalanche blockchain suffered three separate flash loan attacks, depleting the protocol of $2.23 million. In 2021, the project raised $3.3 million in funding led by now-defunct crypto hedge fund Three Arrows Capital.
Since the last attack, Platypus has halted all liquidity pools and is conducting a security review. In a flash loan attack, a hacker exploits a vulnerability that allows them to instantly borrow crypto without providing the necessary collateral for the transaction. The hacker then withdraws the borrowed assets from the protocol, leaving bad debts to be borne by users or the protocol treasury.
This was the third attack against Platypus this year, with a previous incident wasting $157,000 in a flash loan attack in July and another, also a flash loan attack, that saw the DeFi protocol for 8, $5 million was exploited. After the February incident, Platypus claimed in its recovery plan that it would return at least 63% of users’ assets lost in the attack.
2/ Along with the recovery on October 12th, over 90% of the funds have been returned. The net loss was minimized to approximately 18,000 AVAX. We will publish more information about the payout agreement as we progress.
— Platypus (++) (@Platypusdefi) October 17, 2023
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