In wake of crypto hacks and scams regarding the likes of Stake, Crypto.com, Mark Cuban and Vitalik Buterin’s Twitter (X) accounts, and multiple operations from North Korea’s notorious ‘Lazarus’ hackers, Hong Kong-based DeFi protocol Mixin becomes the latest victim of illicit decentralised activity.
The amount taken from the decentralised cross-chain transfer protocol is reported to be to the tune of almost $200 million, with the majority of this coming from the platform’s 9,544 Bitcoin (BTC) in storage (roughly $253 million).
Although crypto hacks are often met with sympathy from surrounding communities, the case of Mixin’s has been somewhat different. This is because onlookers such as Bitcoin mining pool ‘BTC.TOP’ CEO Zhuoer Jiang have claimed that assets should’ve been kept in cold storage, as opposed to a centralised database on its mainnet.
In turn, this criticism rings relatively true, as on-chain analytics showed that such centralised asset storage was in-fact the chink in the platform’s armour, as it offered a single point of access for the conniving hackers to dishonestly appropriate funds.
As common protocol, deposit and withdrawal services have been suspended on Mixin after the breach, with the exception of developer transfers which have continued throughout the investigation.
Additionally, the platform’s founder Xiaodong Feng has released a compensation plan that would see reimbursements worth 50% of stolen funds. With its sights set on continuing to make profits, the remaining 50% of lost funds are planned to be distributed to users as ‘tokenised liability claims’ that Mixin will eventually repurchase through the use of future profits.
For those unaware, Mixin Network is a DeFi protocol designed for enhancing the scalability of blockchains. More specifically, its network mimics services that are similar to those of Layer-2 protocols such as Ethereum’s Polygon - wherein the goal is to offer speedier, cheaper, and more efficient cross-chain transfers.
Before the incident, the platform’s protocol had nearly $400 million worth of crypto from across 48 chains locked-up (per DefiLlama)… however as we now know, such figure has since slumped almost 50%.
As of the time of writing, the culprits behind Mixin’s $200 million crypto attack are yet to be identified.
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This article is intended for educational purposes and is not financial advice.
