Allbridge Provides Compensation Plan for Hacked Users

Allbridge, a multichain token bridge provider, has posted a recovery plan following a recent hack where the project was exploited for roughly $573,000 on April 1. In an April 5 statement, Allbridge said it has already started a compensation process for users despite only “partly recovering funds.” The protocol aims to fully compensate those affected by the exploit with funds available to them.

The compensation plan will prioritize users with funds stuck on the token bridge due to the emergency shutdown. Allbridge aims to compensate its liquidity providers (LPs) following the compensation of these users. An application form is currently being drafted for LPs who could not withdraw their assets, allowing them to apply for compensation and provide details of their losses. The compensation process is expected to commence next week, starting with users who “have used the bridge shortly before the shutdown.”

Allbridge enabled LPs to withdraw their funds on April 2, with the majority withdrawing their assets from the pool. Some, however, could withdraw even more “due to the pool’s disbalance.” Others could not withdraw “a reasonable amount” from the liquidity pool due to some users withdrawing more than their original balances and the hack’s impact on the pools.

The compensation plan comes after Allbridge tweeted on April 3 that 1,500 BNB (BNB), worth approximately $465,000, was returned to the project following a public proposal made to the hacker in an April 1 tweet. The protocol’s exploiter seemingly accepted Allbridge’s offer of a “white hat bounty,” where they could keep a portion of the stolen funds in exchange for an assurance that no legal action would be taken.

Allbridge noted that all affected parties by the exploit will be subject to additional rewards in the future, but compensation remains their main priority. The protocol aims to fully compensate all victims of the exploit with funds available to them.

This compensation plan is a positive step for Allbridge to regain the trust of its users after the hack. While the project was only able to partially recover funds, the compensation process shows a willingness to make affected users whole. The inclusion of an application form for LPs who could not withdraw their assets also shows a willingness to make the compensation process as smooth as possible.

This hack also highlights the importance of security in the DeFi space. While noncustodial protocols allow users to maintain control of their funds, they are also vulnerable to hacks. As the DeFi space continues to grow, it is crucial that projects prioritize security measures to prevent hacks and protect user funds.

Meanwhile, Ethereum-based noncustodial lending protocol Eurler Finance announced on April 4 that it recovered most of the $196 million stolen in a March 13 flash loan attack following successful negotiations. The attacker managed to steal millions worth of Dai (DAI), USD Coin (USDC), staked Ether (stETH), and wrapped Bitcoin (WBTC) in the largest hack of 2023 so far. The quick recovery of stolen funds by Eurler Finance shows the importance of prompt action in mitigating the effects of hacks in the DeFi space.


Tagged : / / / / /

Allbridge Recovers $465,000 Stolen in Crypto Exploit

According to a tweet that was published on April 3, a multichain token bridge known as Allbridge has successfully recovered bitcoin valued at $465,000 that was stolen in a recent exploit. A message was sent to the project by an individual who returned 1,500 BNB, which is equal to $465,000. The remaining money were deemed a white hat reward for the individual, as Allbridge had promised. After that, the project changed all of the Binance Coins (BNB) it had received into Binance Dollars (BUSD) so that they could be utilized as compensation.

Peckshield, a blockchain security company, was the first to discover the vulnerability. On April 1, the company sent a tweet to Allbridge in which it alerted the company that a person was manipulating the BNB Chain pools swap price by serving as both a liquidity provider and a swapper. As the vulnerability was discovered, Allbridge offered the attacker a reward as well as the opportunity to avoid legal repercussions.

Blockchain security companies CertiK and PeckShield calculated that the entire amount taken was very close to $550,000 despite the fact that the project has not publicly stated the complete amount that was stolen. According to PeckShield, the attack generated around $573,000 in total, comprised of $282,889 in Bitcoin USD and $290,868 worth of Tether (USDT).

Allbridge also disclosed that a second address made advantage of the same vulnerability and provided a link to a wallet that at the moment has 0.97 BNB, which has a value of around $300 at the time of this writing. The project requested that the second exploiter make contact and explore the possibility of the monies being returned.

After the original breach, Allbridge made it very obvious that it was collaborating with a number of different groups to recover the missing monies. BNB Chain was one of those firms, and on April 2, it tweeted that it had found at least one of the perpetrators engaged using on-chain analysis. This information was shared with the public. AvengerDAO was recognized by BNB Chain for its contributions to the money recovery effort, and BNB Chain is providing active assistance to the Allbridge team as they work to recover the funds.

The rapid reaction of Allbridge to the vulnerability as well as their offer of a white hat incentive for uncovering vulnerabilities highlight how important it is for the cryptocurrency sector to prioritize security. Projects may strengthen their security and stave off future assaults if hackers are offered financial incentives to disclose flaws rather than use them for their own gain. On the other hand, it is essential for organizations to collaborate in order to track down missing cash and hold those responsible for the thefts accountable for their actions.


Tagged : / / / / /
Bitcoin (BTC) $ 44,481.92 2.61%
Ethereum (ETH) $ 2,369.31 0.34%
Litecoin (LTC) $ 78.00 5.97%
Bitcoin Cash (BCH) $ 253.93 3.27%