Wormhole Announces $320M Worth of Stolen Funds Have been Restored

After one of the largest cryptos hacks ever recorded, Wormhole announced on Thursday via Twitter that “all stolen funds have been replaced.”

crypto.news informed on Wednesday how Wormhole unveiled that 120,000 digital tokens linked to ether, the second-largest crypto, had been stolen from its network. 

Wormhole Report Shows the Stolen Funds were Restored

The tokens’ market value was a little over $320 million during their announcement. This is the most recent heist to hit the rapidly growing DeFi sector. All funds have been restored, and the organization is back up and running. Wormhole provided no other details about how the cash was recovered, and it did not reply to several requests for comment via social media. 

Wormhole Case Shows Hacking is a Threat to DeFi

DeFi sites have received a flood of cash, matching the overall surge in interest in cryptocurrencies.

Many investors are enticed by DeFi’s juicy returns on savings in the face of historically low or sub-zero interest rates.

However, due to their rapid expansion, DeFi platforms have become a major hacker target, with faults in the code and architectural weaknesses allowing criminals to attack DeFi sites and deep pools of liquidity and launder the proceeds of crime, with little trace.

According to Elliptic analysis, fraud and theft on DeFi platforms exceeded US$10 billion last year, exposing the perils in the fast-growing but mostly unregulated world of cryptocurrency.

Last August, the hackers who stole nearly all of the US$610 million-plus from the DeFi site Poly Network returned all of the money virtually.

Hacks have long plagued cryptocurrency systems.

Coincheck, a Tokyo-based company, had $530 million worth of digital tokens stolen in 2018.

Another Japanese exchange, Mt. Gox, went bankrupt in 2014 after hackers stole half a billion dollars in cryptocurrency.

Can these Hacks be Prevented?

Crypto hacks are not uncommon anymore. Despite their growing popularity, digital currencies like Bitcoin, Ethereum, and Solana remain mostly unregulated. According to Gary Gensler, chairman of the SEC in the United States, cryptocurrency is “rife with fraud, frauds, and misuse” and “more like the Wild West.”

Additionally, there is still one major issue: the whereabouts of the “stolen monies” and whether or not the cybercriminal who obtained them would face sanctions to dissuade future decentralized finance scams. The fungibility of “hacked” ETH tokens as they are laundered into “clean.” 

ETH raises concerns because these tokens were unlawfully acquired and remain in the ecosystem. Furthermore, many tokens being produced may cause transitory inflationary problems.

Every new idea or innovation comes with its own set of security and adoption problems. As a new growth in the finance business, cryptocurrency has its own set of security and legal problems.