Platypus Finance to compensate users affected by exploit, more inside

  • Platypus Finance has laid out compensation plans for users affected by last week’s $9 million exploit.
  • The platform will ensure a compensation of 63%, which may increase to 78% based on a governance vote on Aave.

Decentralized-finance (DeFi) protocol Platypus Finance has announced that it will repay a minimum of 63% of funds to its users after recovering a portion of the $9 million exploited from the platform last week.

The platform was hacked in a three-part attack that exploited a bug in the platform’s solvency check mechanism, resulting in the theft of several crypto assets including Circle’s [USDC], [USDT], Maker [DAI], and Binance USD [BUSD].

78% fund recovery rate may be possible 
According to a 23 February blog post by Platypus Finance, the platform worked with crypto exchange Binance to confirm the identity of the exploiter, who used a Binance account that went through know-your-customer checks for a withdrawal request. The protocol contacted law enforcement and filed a complaint in France regarding the hack.

A team from blockchain intelligence firm BlockSec assisted Platypus Finance in recovering $2.4 million worth stolen USDC. Additionally, Tether froze $1.5 million worth of stolen USDT. However, $287,000 worth of assets stolen in the third attack were written-off as lost and unrecoverable. The hacker ran the stolen assets through crypto mixer Tornado Cash and encryption service Aztec Network, making them untraceable.

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In the blog post, Platypus Finance clarified that it had not used its $1.4 million treasury to compensate victims. However, it may do so over the next six months if the platform could not recover more assets. Additionally, the protocol submitted a proposal to Aave’s governance forum for the release of $380,000 of stablecoins mistakenly transferred to the lending protocol. If approved, the compensation for users would go up to 78%. 

As for Platypus Finance’s future actions, a police case has been filed against the exploiter. Additionally, a filing for the cybersecurity department was underway. The pool will relaunch as soon as next week, without the functions associated with USP. On-chain voting is also planned to ensure participation from the community in the decision-making process.

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