Defrost v1 hacker reportedly returns funds as ‘exit scam’ allegations surface

On Dec. 26, blockchain safety agency CertiK issued a warning alleging that Defrost Finance, a decentralized leverage-trading platform on the Avalanche blockchain that lately suffered an exploit, is an “exit rip-off.” The transfer got here simply as Defrost announced that “the hacker concerned within the V1 hack [but not the v2 hack] has returned the funds.” CertiK wrote:

“On 24 December we’ve got seen an #exitscam on @Defrost_Finance. We’ve tried to contact a number of members of the group however have had no response. The group will not be KYC’d however we’re utilizing all the knowledge that we do have to help with authorities.”

On Dec. 23, Defrost Finance suffered a flash mortgage assault that drained protocol customers of $12 million in belongings on its v1 and v2 protocols. Instantly after the exploit, blockchain analytics agency PeckShield additionally issued a warning, alleging the operation was a “rugpull”:

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“We obtained neighborhood intel warning the rugpull of @Defrost_Finance.Our evaluation reveals a faux collateral token is added and a malicious worth oracle is used to liquidate present customers. The loss is estimated to be >$12M.”

In a short autopsy evaluation, mission builders said that hackers additionally managed to steal the proprietor key for a a lot bigger assault on its v1 protocol than the flash mortgage exploit. Defrost has offered to barter “sharing 20% (negotiable) of the funds in alternate for the majority of belongings and are calling on the hackers to contact us asap.”

After posting an Ethereum pockets tackle on its social web page, near $3 million value of digital belongings had been transferred there on the time of publication. In a Medium publish published hours later, Defrost defined that the v1 hacker had returned the stolen funds to an tackle managed by the mission builders.

“We are going to quickly begin scanning the information on-chain to seek out out who owned what previous to the hack as a way to return them to the rightful homeowners. As totally different customers had variable proportions of belongings and debt, this course of may take a bit of. Nevertheless, it is going to be concluded pretty swiftly.”