Home - DeFi News - French police arrest two suspects over Platypus Finance hack

James Carter

March 2, 2023

French police arrest two suspects over Platypus Finance hack

Platypus Finance, which is a decentralized finance (DeFi) protocol for stablecoins, disclosed yesterday that French authorities had arrested and summoned two suspects who had reportedly exploited their platform in the past. Platypus Finance made the announcement.

French police arrest two suspects over Platypus Finance hack

Platypus would like to express their gratitude to the French National Police, Binance, and ZackXBT for their assistance in identifying and tracking down the criminals.

French police arrest two suspects over Platypus Finance hack

The three-stage hack

According to an explanation provided by Platypus in a blog entry, the hack was carried out in three stages. The first level was the most severe, with $8.5 million worth of stablecoins being drained from the main pool of the DeFi protocol. These stablecoins included Tether’s USDT, Circle’s USDC, Maker’s DAI, and Binance’s BUSD.

French police arrest two suspects over Platypus Finance hack

Following the cyberattack, Platypus was able to recover $2.4 million worth of the stolen USDC stablecoins with the assistance of the blockchain security business BlockSec. In addition, $1.5 million worth of misappropriated USDT was frozen by Tether.

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The second assault involved the inadvertent transfer of stablecoins with a total value of $380,000 to the widely used lending protocol Aave. Platypus contacted Aave’s governance group in order to obtain permission to release those assets.

The hacker was successful in stealing unrecoverable assets worth a total of $287,000 during the third and final assault. These assets were being moved through the cryptocurrency mixer Tornado Cash and the encryption service Aztec Network.

According to Platypus, they had financial reserves totaling $1.4 million, but they hadn’t used any of them to compensate the people who had been hacked in any way. However, if the protocol was unable to reclaim any additional assets over the following six months, they might be forced to spend money from the Treasury.

If Tether could assist with defrosting the frozen, 78% of the users’ funds would be recovered thanks to USDT and Aave’s approval of the recovery request. Tether would be able to do this, thanks to Aave’s approval of the recovery request. The following week, Platypus made the announcement that they would bring back the stablecoin swap mechanism without the depegged USP stablecoin.

Platypus to compensate victims

The DeFi platform released details of its reimbursement plan on February 23, stating that it would return at least 63% of the funds to users who had their accounts compromised by the recent exploit.

In the past week, hackers were able to steal more than $9 million from the protocol. Platypus collaborated with the cryptocurrency exchange Binance to ascertain the identity of the exploiter. The infiltrator submitted a withdrawal request from a Binance account after the account had been verified using KYC procedures. Platypus claimed that they had gotten in touch with the local authorities and lodged a complaint in France.

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During the attack, the hacker took advantage of a flaw in the solvency check mechanism of the platform. This allowed the hacker to capture digital assets worth $9.2 million and caused the platform’s native stablecoin, USP, to lose its dollar peg.

Even though the process of recovery is still in progress, Platypus Finance is still dedicated to providing its customers with a platform that is trustworthy and safe for all of their financial requirements.