Cryptocurrency platform loses estimated US$600 million in cyberheist

HONG KONG/SINGAPORE /LONDON: A cryptocurrency platform has lost an estimated US$600 million (RM2.54 billion) in digital tokens after one of the sector’s biggest ever hacking attacks, according to details of the heist which emerged yesterday.

Poly Network, a decentralised finance platform (DeFi), announced the hack on Twitter and posted details of digital wallets to which it said the money was transferred, urging people to blacklist tokens from those addresses.

The value of the tokens in the wallets cited by Poly Network was just over US$600 million at the time of the announcement, according to crypto trade publication The Block.

The heist appears to be one of the biggest ever in cryptocurrency markets, and compares with the US$530 million in cryptocurrency stolen from Tokyo-based bitcoin exchange Coincheck in 2018.

Crypto exchange Mt Gox, also based in Tokyo, collapsed in 2014 after losing half a billion dollars in bitcoin.

The latest attack comes as losses from theft, hacks and fraud related to decentralised finance hit an all-time high, raising the risk of both investing in the sector and of regulators looking to shake it down.

DeFi refers to peer-to-peer cryptocurrency platforms that allow transactions without traditional gatekeepers such as banks or exchanges. Poly Network allows users to swap tokens across different blockchains.

“It is a massive hack ... as large as Mt Gox,” said Bobby Ong, co-founder of crypto analytics website CoinGecko, although he noted the fallout had not yet hurt major crypto prices.

“This project is finished in my opinion. (It is) going to take a lot to regain confidence,” Ong said.

Poly Network did not immediately respond to a request yesterday for more detail about the incident. It was not immediately clear where the platform is based, or whether any law enforcement agency was investigating the heist.

Poly Network tweeted it planned to take legal action and urged the hackers to return the assets, a move analysts said underscored how hard it is to recover stolen tokens.

“It is not like an ordinary bank heist where the money is stolen from the bank who remains the victim,” said Jake Moore, cybersecurity specialist at cybersecurity firm ESET and former head of digital forensics at Britain’s Dorset Police.

“Money stolen which is stored in digital ledgers is taken from individual accounts and this is what worries those choosing to store their money in these locations,” Moore added. – Reuters