This Stablecoin Suffered 50% Depeg Following $8.5M Hack

Platypus, a decentralized finance (DeFi) protocol, was the victim of a flash loan attack worth $8.5 million. The stablecoin USP got depegged by 50% before recovering the peg.

The DeFi protocol Aave developed flash loans in 2020, which made lending and borrowing simpler without collateral. In layman’s language, a crypto loan is taken out and repaid within the same transaction in a flash loan. But, this facility attracted bad actors to take huge loans and then use the amount to manipulate the market in their favor. Such malicious activity is referred to as a flash-loan attack

The DeFi protocol, Platypus, became the latest victim of the flash loan attack, which saw the hacker drain approximately $8.5 million.

Team Works on Recovery Plan

Platypus Finance is a stablecoin swap on the Avalanche blockchain. Recently, it launched its stablecoin USP on Feb. 6. The attackers conducted a flash loan attack by exploiting a logic error in the USP solvency check mechanism.

After the attack, the USP lost its peg and was trading at around $0.47, but now the stablecoin has almost recovered its peg.

Source: CoinGecko

The team is working with Binance, Tether, and Circle to freeze the fund. They have successfully managed to freeze the USDT. The protocol has also paused all the withdrawals for the time being.

According to the latest Discord message from the admin, the team will soon release a “full recovery and action plan.” 

ZachXBT Tracks Down Identity of Attacker

The on-chain sleuth ZachXBT traced down the wallet addresses of the attacker to a Twitter account, “retlqw.” He reached out to the potential attacker to negotiate the return of the fund, but the person deactivated their Twitter and Instagram accounts.

As the team froze a significant portion of the fund, the community believes that the hacker does not have a chance of negotiating a bounty negotiation.

Got something to say about Platypus or anything else? Write to us or join the discussion on our Telegram channel. You can also catch us on TikTok, Facebook, or Twitter.

For BeInCrypto’s latest Bitcoin (BTC) analysis, click here.

Disclaimer

BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.

Bookmark (0)

Related Posts

How Crypto Fugitives Evade the Authorities

Police arrested Do Kwon and a second individual at Montenegrin airport Thursday.
Kwon had disappeared for ten months. We speculate on some of the ways he did it.
BeInCrypto does not endorse any criminal behavior.

Bookmark (0)

Bitcoin vs. Hyperinflation

Investigating the role of Bitcoin in economies such as Zimbabwe, Venezuela, and Argentina, where hyperinflation has wreaked havoc.
Understanding the challenges and drawbacks Bitcoin faces, including regulatory hurdles and environmental concerns.
Exploring the future of global finance, as central banks consider the development of their own digital currencies.

Bookmark (0)

Solana (SOL) Price Recovers, but Is It Gearing up for a Bigger Move?

Solana (SOL) price broke out from a descending resistance line.
It is facing resistance at $22.90.
Solana (SOL) might have completed an A-B-C correction.

Bookmark (0)

This Week in Crypto News: Balaji’s $1M Bitcoin Bet, Big Brother CBDCs, and India Conquers Crypto

Balaji Srinsavan, the former tech chief at Coinbase, has high hopes for Bitcoin (BTC).
The Federal Reserve has printed $300 billion to bail out banks.
And Governor Ron DeSantis bans CBDCs in Florida.

Bookmark (0)

Which venues will list the upcoming ARB token dropping on March 23?

Major crypto platforms are gearing up for the upcoming ARB token listing on March 23.

Bookmark (0)

Is Tokenization the Future or a Plague of False Promises?

BlackRock CEO Larry Fink shares mixed messages on the potential of tokenization.
Tokenization offers promising benefits but also presents challenges to navigate.
Industry leaders and regulators must balance innovation and risk management to ensure tokenization’s success in the financial landscape.

Bookmark (0)

Leave a Reply

Your email address will not be published. Required fields are marked *