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Amid this week’s broad cryptocurrency selloff, an alleged hacker linked to one of many largest DeFi exploits was swept up in liquidations totaling over $60 million.
In keeping with an evaluation by blockchain forensics agency PeckShield, a crypto pockets related to the theft of practically 600 million Binance Coin (BNB) in October 2021 noticed collateral price $63 million routinely liquidated on the Venus Protocol lending platform.
The occasion behind the brazen BNB hack, which focused the BSC Token Hub cross-chain bridge, has evaded identification up to now. The North Korea-affiliated Lazarus Group was tied to related previous exploits.
Crypto Hacker Caught in Market Stoop
Whoever the perpetrator is, blockchain knowledge reveals their devious techniques to extract most acquire from the stolen funds. The hacker leveraged 900,000 stolen BNB, price about $197 million, as collateral to borrow $147.5 million in stablecoins on Venus.
But the pseudonymous profiteer quickly fell sufferer to the savage crypto downturn. As BNB dropped beneath $220 amid market mayhem, the hacker’s overexposed collateral positions have been systematically worn out.
The episode underscores the high-risk, high-reward nature of crypto lending protocols. Whereas good contracts automate processes like lending and liquidations, excessive volatility can quickly erase overleveraged bets.
For DeFi customers lured by the potential features of leverage, such liquidation cascades underline the necessity for warning. Had the hacker maintained a decrease collateral ratio, the mass liquidations might have been averted.
For criminals trying brazen crypto heists, the occasion additionally affords a lesson. The transparency of blockchains offers little cowl from the ruthless math of markets and good contract logic.
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