$600 Million Crypto Stolen in Poly Network Cyberattack, Explained

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Aug. 12 2021, Published 1:31 p.m. ET

On Aug. 10, a cyberattack that targeted the decentralized finance platform Poly Network ended with the unknown bad actor walking away with over $600 million worth of cryptocurrency. The hacker apparently took advantage of a flaw in Poly Network’s code in order to steal the funds.

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According to an anonymous person claiming to be at the center of what's one of the largest cryptocurrency thefts of all time, the theft was simply “for fun.” The person said that they hoped the network would learn something from the hack.

What is Poly Network?

The Poly Network is a platform that links multiple blockchains of a variety of virtual currencies to facilitate their working together.

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what is poly network
Source: Poly Network Twitter

A blockchain is a type of database, a specific digital ledger that keeps a record of transactions, which is maintained by a network of computers rather than a centralized authority like a government. In blockchain, data is stored in blocks that are chained together and stored chronologically.

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How much of each cryptocurrency was stolen?

Poly Network took to Twitter and attempted to reason with the hacker or hackers, noting that they had stolen money from tens of thousands of members of the crypto community and appealing to them to discuss a solution. Poly Network also provided addresses for the hacker to use for returning the stolen cryptocurrencies.

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Over $610 million was stolen. On Aug. 11 and Aug. 12, Poly Network tweeted updates about how much of the stolen virtual currencies had been returned. As of the morning of Aug. 12, the DeFi network said that the following amounts of cryptocurrency had been returned:

  • $4.6 million of Ethereum
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    At that point, the Poly Network said that there was still $268 million worth of Ethereum missing due to the cyberattack. Multiple other virtual currencies were stolen as well. Poly Network has continually updated customers on Twitter about the priority of recovering all of the stolen assets.

    Poly Network has mentioned that the hacker could be a “white hat” type of hacker, meaning one who conducts a cyber breach for the purpose of improving the security of a network. They are now calling the thief in this instance “Mr. White Hat” in tweets regarding the cyberattack.

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    Is cryptocurrency a safe investment?

    Cryptocurrency includes many different virtual coins like Bitcoin and Ether. Investing in cryptocurrency has a high level of risk due to the potential for fraud and hacks, as shown by the Poly Network cryptocurrency theft.

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    However, “cryptocurrency theft is more difficult to get away with than theft of fiat funds,” said Chainalysis. The blockchain forensics firm said that the hacker couldn’t withdraw the stolen funds without being caught, since all blockchain transactions are recorded and traceable.

    CNN noted that regulators are trying to crack down on cryptocurrency platforms. SEC chair Gary Gensler said, “Right now, I believe investors using these platforms are not adequately protected.” This was in response to a request from Senator Elizabeth Warren for the SEC to look into the organization’s ability to oversee cryptocurrency trading.

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