Cypher Protocol reveals $600K of stolen funds is now frozen on CEXs

Solana-based decentralized futures exchange Cypher Protocol has managed to freeze $600,000 worth of crypto stolen from an Aug. 7 security exploit.

In an X (Twitter) post on Aug. 18, Cypher Protocol reported that more than half of the funds stolen have been successfully frozen across centralized exchanges with the help of several independent blockchain investigators.

“The return of these funds will be predicated on the cooperation of these CEXs and seizure warrants being issued by law enforcement,” it said.

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

Cypher was exploited on Aug. 7 for around $1 million, resulting in the protocol halting its smart contracts.

The DeFi exchange enables lending and borrowing through primary accounts with multiple cross-collateralized sub-accounts. However, the vulnerabilities prevented proper tracking of isolated sub-accounts and insufficient margin checks before borrowing, explained blockchain security firm Halborn.

The attacker exploited these code vulnerabilities using multiple accounts to drain an estimated $1 million in various crypto assets, including USDT, USDT, SOL, wETH and a handful of other altcoins.

On Aug. 10, the team managed to make contact with the hacker after it offered a 10% white hat bounty worth around $120,000.

Two days later, the protocol said the hacker had missed the deadline to return the funds and opened the bounty up to the public. They also hinted at knowing the partial identity of the exploiter.

The reward bounty is now open to the public pic.twitter.com/fEIiQ8rTKN

— cypher ©️ (@cypher_protocol) August 12, 2023

On Aug. 16, Cypher

According to the REKT database, the Cypher exploit was not the largest so far in August, coming in third.

DeFi protocol Zunami suffered a $2.1 million flash loan attack on Aug. 13 and leveraged yield aggregation platform Steadefi was exploited for $1.1 million on Aug. 7.

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