$6.4M ETH Exploit: Stablecoin Hacker Returns Majority of Stolen Funds

$6.4M ETH Exploit: Stablecoin Hacker Returns Majority of Stolen Funds

Seneca Stablecoin Hacker Returns Majority of Stolen Funds

“Ezra Reguerra” orchestrated a notorious attack on the Seneca stablecoin protocol. Reports indicate that the hacker infiltrated the Seneca stablecoin protocol, stealing $6.4 million worth of Ethereum (ETH).

The exploit, facilitated by a critical “call” vulnerability embedded within the protocol’s smart contract, allowed the attacker to bypass the system’s security measures effectively. Findings by security analysts from CertiK, a leading blockchain security firm, emphasized the urgent need for a comprehensive audit of smart contract codes and implementation of solid security protocols by decentralized finance (DeFi) projects.

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Following the exploit, Seneca issued a warning notice to users, advising them to revoke approvals associated with its compromised address on the Ethereum and Arbitrum networks.

Seneca Offers A $1.2M Bounty

In response to the crisis, Seneca is offering a bounty of $1.2 million for the safe return of the stolen funds. Furthermore, the project’s team proposed that the hacker retain 20% of the stolen assets and return the remaining amount to a specified Ethereum address.

Also, Seneca issued an on-chain message directly to the perpetrator, urging them to act swiftly to avoid legal repercussions. Surprisingly, Ezra Reguerra, the figure behind the exploit, opted to accept Seneca’s 20% bounty, retaining 300 ETH (about $1 million).

Thus, Ezra returned 1,537 ETH (or approximately $5.3 million). Nevertheless, there are still concerns among many industry players over the security of decentralized protocols and the need for enhanced measures to safeguard investor funds.

So far, February has been a tumultuous period for various DeFi projects, with $290 million stolen from PlayDapp and various wallet breaches and phishing scams. Thus, the industry faces an ongoing battle against malicious actors.

Shido Blockchain Loses 4.29B SHIDO Tokens To Hackers

In a related development, hackers exploited the Ethereum staking contract of the Shido blockchain. SHIDO’s price plummeted by 94% following the incident within 30 minutes.

According to reports from PeckShield (a leading cybersecurity firm), the attacker swiftly transferred Shido tokens worth billions out of the staking contract. Furthermore, the firm revealed that the attacker had implemented a hidden function to withdraw the staked tokens.

Over 4.29 billion Shido tokens, representing almost 50% of the token’s circulating supply, were siphoned off by the hacker in moments. Before the exploit, the value of the tokens stood at about $34.9 million, underscoring the devastating impact of the attack on investors.

Further investigation by famous on-chain crypto exploit researcher ZachXBT uncovered the origins of the attacker’s funding. He stated that the funds used in the attack are traceable to the Layerswap and the Arbitrum blockchain. However, ZachXBT noted that the hacker seemed to have hacked the wallet owner who funded them, as the wallet owner’s assets vanished before the attack.

Cybersecurity Concerns Mount

In the aftermath of the exploit, questions loomed over the future of Shido and the broader implications for the crypto industry. While the project did not immediately respond to requests for comment on the contract exploit, the incident served as a stark reminder of the persistent threats faced by participants in the crypto space.

The exploit on the Shido blockchain comes amid a backdrop of increasing cyber threats targeting the crypto industry. According to PeckShield, over 600 crypto-related hacks last year resulted in $2.1 billion in losses. While this amount is slightly down from 2022 figures, the start of 2024 has already seen 30 attacks with $182.5 million lost, signaling a worrying trend for the industry.

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Rudy Harris
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Rudy Harris

Rudy Harris, a dynamo in crypto journalism, intricately unpacks the multifaceted world of digital assets. Renowned for his analytical depth and clear exposition, Rudy's articles serve as an essential compass for those navigating the intricate corridors of blockchain and cryptocurrency, solidifying his stature as a trusted expert.

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