Latest Crypto Hack: The Biggest In Growing DeFi Thefts

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On August 10, Poly Network suffered a $611 million hackβ€”the largest crypto-related hack to date.

Poly Network is a decentralized platform facilitating transactions across various blockchains. The platform has developed integrations between many major networks such as Bitcoin, Ethereum, Neo, and Binance Smart Chain.

On August 10, A Hacker stole digital tokens valued at $611 million by taking advantage of Poly Network’s role as a ‘middle man’. For each transaction, a signature called a ‘keeper’ is used to confirm it, which the hacker was able to replace with ‘keepers’ of their own. This essentially allowed the hacker to control the entire network and to direct tokens to addresses under their control.

The hack was announced by Poly Network on twitter, and attention was brought to various wallets the hackers used to transfer some of the tokens.

The transparency of crypto wallets allowed various blockchains and cryptocurrencies to publish the wallet addresses, asking traders and miners to blacklist the wallets which would prevent the hacker from moving the funds.

Although a large portion of the hacked tokens were able to be stopped from moving further, it was pointed out that the way DeFi (Decentralized Finance) works is that there is no control. This forces them to rely on a collective and coordinated response such as in this case to prevent hacks and theft.

An important aspect that contributed to the response to this hacker is the scale of the theft, being significantly higher than any previous crypto hack. This made it extremely difficult to move the funds without attention, and allowed it to become major news within the crypto community, ultimately forcing the hacker to begin returning some of the tokens.

This is not the case with many other hacks that go unnoticed, and aren’t big enough to attract the attention it needs to prevent moving the tokens. While this was the largest hack in the history of DeFi, it is part of a growing trend of hacks and thefts.

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In the 8 months of 2021 alone, DeFi hacks and thefts have surpassed those in 2020 by close to tenfold. This is becoming increasingly worrying for developers who are forced to constantly create sophisticated security technology.

Although the transparency within DeFi allows for some of the hacks to be tracked, many of the hacks go unnoticed or when it is noticed it is already too late. As DeFi becomes increasingly sophisticated to protect from theft, hackers are working on infiltrating the new systems.

As financial regulators struggle to keep up with the pace of technology, it seems there will be no meaningful regulation introduced to prevent thefts for the foreseeable future.

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