Skip to content
Active Currencies: 17,408
Market Cap: $2.243T
Bitcoin Dominance: 56.29%
24h Market Cap Change: $-1.69

Defrost hacker returns stolen funds: Is there an exit scam to watch out for
Written by Written by Saman Waris
Reviewed by Reviewed by Saman Waris
Updated December 27, 2022
  • The hacker responsible for the $12 million hack on Defrost Finance returned the exploited funds
  • The DEX will soon launch a smart contract to refund all the affected users

In an interesting turn of events, the perpetrator behind the attack on Avalanche’s Defrost Finance returned the funds he siphoned off the decentralized exchange. The surprising return came a day after the initial flash loan attack that took place on 25 December. The hack had led to a loss of more than $12 million. 

The return of the funds…

According to a blog post by Defrost Finance, the hacker behind the hack on V1 returned all the funds that had been exploited. The DEX shared a wallet address that contained the funds returned by the hacker. At the time of writing, the address had close to $3 million worth of ETH and 9.9 million DAI. 

The latest update by Defrost Finance revealed that the team will start refunding the users who were affected by the hack. The next few days will see the ETH returned by the hacker converted into stablecoins, preferable DAI. These stablecoins will then be crossed from Ethereum to Avalanche. 

Following an on-chain scan to determine rightful ownership of the stolen crypto, a refunding smart contract will be deployed.

“Rightful users will be able to claim their assets back in stablecoins to the same addresses.” the Defrost team stated. 

Allegations of an exit scam

The hours following the hack saw multiple allegations of a rug pull or a similar malicious action. On-chain intelligence firm PeckShield cited “community intel” while warning that the hack on the DEX was a rug pull. 

Blockchain security firm CertiK also took to Twitter and revealed that multiple attempts to contact the Defrost Finance team had proven futile. This led to the firm alleging that the hack was an “exit scam”. This meant that the developers disappearing with investors’ funds following investment into their project. 

Prior to the return of funds, the Defrost team had offered the perpetrator up to 20% of the funds in exchange for the bulk of the exploited assets.

Disclaimer: AMBCrypto's content is meant to be informational in nature and should not be interpreted as investment advice. Trading, buying or selling cryptocurrencies should be considered a high-risk investment and every reader is advised to do their own research before making any decisions.

Saman Waris

Editor

Saman Waris works as a Senior News Editor at AMBCrypto. She has always been fascinated by how the tides of finance and technology shape communities across demographics. Cryptocurrencies are of particular interest to Saman, with much of her writing centered around understanding how ideas like Momentum and Greater Fool theories apply to altcoins, specifically, memecoins.

Related Articles

AMBCrypto
Facebook X Instagram Youtube Linkedin

AMBCrypto was founded in 2018 with a mission to simplify and bring the latest blockchain and cryptocurrency news to our readers. We have quickly grown into the digital news source for an emerging generation of cryptocurrency enthusiasts, reaching more than a million readers on a monthly basis, across the globe.