Cypher Protocol Freezes $600K in Stolen Funds on CEXs

• Cypher protocol has announced a freeze on some stolen funds.
• The protocol is yet to recover the funds fully.
• Other bigger hacks happened in August.

The exploit saga surrounding Cypher Protocol has taken a promising turn as the Solana-based decentralized futures exchange announced that it has managed to freeze over half of the recently stolen cryptocurrencies.

Through a Twitter post on its official account, the protocol noted that it has managed to hold $600,000 worth of crypto on various centralized exchanges with the help of independent investigators. Following this, the full recovery of the funds will be predicated on the liaison of the involved exchanges and seizure warrants from law enforcement.

update from cypher

~$600k has been frozen across CEXs, the return of these funds will be predicated on the cooperation of these CEXs and seizure warrants being issued by law enforcement

— cypher ©️ (@cypher_protocol) August 17, 2023

Failed Negotiations

This development comes after Cypher contacted the hacker on August 10 and offered a 10% Whitehat bounty if the stolen funds were returned. As this yielded no result, the protocol opened the bounty to the public and invited independent parties to help identify the attacker.

Again, the efforts proved futile until the protocol decided to initiate a redemption plan on August 16:

“In response to the recent Cypher Protocol exploit, we are implementing the socialized losses mechanism. A "redemption package" will be prepared using assets that still reside within the protocol. This means, despite the exploit, there are assets intact and available for users,” read the announcement.

Crypto Hacks and Exploits on the Rise

Although the Cypher exploit has elicited internet conversations for the better part of the month, it isn’t the only hack in August. Here is what we know: 

• The REKT database ranks Cypher’s hack as the third-biggest exploit of the month.
• The biggest hack involved DeFi protocol Zunami, where $2.1M in crypto was stolen in a flash loan attack on August 13. 
• Leveraged yield aggregation platform Steadefi suffered an exploit on August 7 and lost $1.1 million to the attackers.

Here is how Curve recovered 73% of stolen funds from its protocol:
Curve Bounces Back, Recouping 73% of Stolen Funds

What happens when crypto hackers are busted? Learn from this story:
Bitfinex Hackers Plead Guilty to Stealing Billions in Crypto