Platypus Finance, a decentralized finance (DeFi) protocol, has announced that it has recovered 90% of the assets stolen in a security breach that occurred last week. The developers stated in an announcement on October 17 that the net loss from the breach was limited to “18,000 Avalanche,” equivalent to $167,400 at the time. The hacker voluntarily returned the funds, and as a result, Platypus Finance has confirmed that no legal action will be pursued. The developers also revealed that they will soon provide withdrawal information regarding users’ assets.
The security breach took place on October 12 when the automated market maker running on the Avalanche blockchain experienced three separate flash loan attacks, resulting in a loss of $2.23 million. Platypus Finance had previously raised $3.3 million in funding, led by the now-defunct crypto hedge fund Three Arrows Capital, earlier in 2021.
Following the recent attack, Platypus developers have temporarily halted all liquidity pools and are conducting a thorough security audit. Flash loan attacks occur when a hacker exploits a vulnerability that allows them to instantly borrow cryptocurrencies without providing any collateral. The hacker then withdraws the borrowed assets from the protocol, leaving behind bad debt for the users or protocol treasury to bear.
This is not the first time Platypus Finance has been targeted by hackers. Earlier this year, the protocol experienced two flash loan attacks. In July, $157,000 was drained, while in a previous attack, the protocol lost $8.5 million. As a response to the February incident, Platypus Finance had announced a recovery plan to return at least 63% of the users’ assets lost in the attack.
With the latest recovery, Platypus Finance has managed to retrieve over 90% of the stolen funds, significantly minimizing the net loss to approximately 18,000 AVAX. The protocol has assured its users that further information on withdrawal arrangements will be released as they progress.
In conclusion, Platypus Finance has successfully recovered a substantial portion of the assets lost in the recent security breach. The protocol’s developers have taken immediate action by halting liquidity pools and conducting a security audit. The recovered funds signify a positive outcome for the affected users, and Platypus Finance aims to provide transparent withdrawal information in the near future. However, the recurrence of such attacks highlights the ongoing need for robust security measures within the DeFi space.