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Solana’s Biggest Hack Ever: $325 Million In Crypto Allegedly Stolen From $1 Billion Decentralized Finance Platform

Published 5 months ago
By Forbes

TOPLINE

Wormhole Portal, a platform that helps users transfer cryptocurrency between the Solana and Ethereum blockchains, said Wednesday afternoon a hacker had stolen more than $325 million worth of tokens in what experts call one of the biggest hacks ever in the booming $192 billion decentralized finance space—an area regulators seem keen to crack down on after a slew of high-profile heists.

KEY FACTS

Blockchain platform Wormhole, which launched last August and holds roughly $1 billion in deposited funds, notified users of a possible hack on Twitter at about 4 p.m. ET Wednesday, saying its network was down for maintenance as the firm looked into a potential attack.

About an hour later, Wormhole said its network had been exploited and claimed about 120,000 tokens of a cryptocurrency known as wrapped ether, which tracks the value of the world’s second-largest cryptocurrency, ether, had been stolen, representing some $325 million in value.

In a message embedded onto the Ethereum blockchain, Wormhole offered the attacker a $10 million bounty to return the funds, according to blockchain analytics company Elliptic, which called the Wednesday incident the fourth largest cryptocurrency hack ever.

Wormhole did not immediately respond to Forbes’ request for comment, but it said shortly before 7 p.m. that the network’s vulnerability had been “patched”; it’s still unclear who the alleged hacker is and how Wormhole users may have been affected by the heist.

Soon after the attack, analysts at blockchain security firm CertiK said the hack represented the largest-ever attack on the Solana network and an “unfortunate reality” for the booming decentralized finance space, which has heated up among investors alongside the broader cryptocurrency industry over the past year, despite a growing number of similar hacks.

Even though the space only started gaining traction in 2020, there have been more than $2 billion in direct losses suffered by decentralized finance services due to hacks and exploits, according to Elliptic on Wednesday.

BIG NUMBER

$192 billion. That’s the current market value of all decentralized finance tokens, according to cryptodata website DeFi Llama. The figure shot past $250 billion for the first time ever in December but has since fallen amid a broader cryptocurrency market sell-off.

KEY BACKGROUND

Securities and Exchange Commission Chairman Gary Gensler has repeatedly said the decentralized finance industry, also known as DeFi, deserves more government scrutiny. Such platforms largely sidestep traditional intermediaries like central banks and exchanges for financial services and instead rely on blockchains and cryptocurrencies to process transactions. Gensler has said the practices can implicate securities, commodities and banking laws, and last year called on Congress to ramp up its authority over the cryptocurrency industry, which he likened to the “Wild West.” 

TANGENT

In August, hackers breached blockchain-based platform Poly Network and extracted more than $600 million in cryptocurrencies, marking DeFi’s biggest hack ever. Those funds were eventually returned.

FURTHER READING

Hacker Returns Nearly All $600 Million Stolen In Ethereum, Other Tokens After Major Crypto Heist (Forbes)

By Jonathan Ponciano, Forbes Staff

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