JPEG’d, a nonfungible token finance (NFT-Fi) protocol, has announced that the hacker responsible for the major hack on Curve Finance has returned 5,495 Ether (ETH), equivalent to around $10 million at current prices. In return for returning the stolen funds, the hacker received a bounty of 610.6 ETH ($1.1 million).
JPEG’d is a decentralized lending protocol that allows users to borrow funds against their collateralized NFTs. It was one of the victims of the recent hack on Curve Finance, which resulted in the loss of $11.6 million worth of crypto. However, on August 4th, the JPEG’d team confirmed that the funds have been returned to the decentralized autonomous organization (DAO) multisig wallet address.
The JPEG’d team regards this event as a white-hat rescue, stating that any further investigations or legal actions against the hacker will be discontinued. They view the hacker’s return of the stolen funds as a positive outcome for the protocol.
The hack on Curve Finance had a significant impact on the decentralized finance (DeFi) ecosystem in late July. Several liquidity pools on Curve Finance were drained, resulting in estimated losses of around $70 million worth of crypto. The hacker exploited a security vulnerability in the Vyper smart contract programming language used by these pools.
In addition to JPEG’d, other projects impacted by the exploit include decentralized exchange Ellipsis, lending platform Alchemix, and synthetic protocol Metronome. These projects collectively suffered millions of dollars in stolen assets from their liquidity pools. Curve Finance itself lost approximately $22 million worth of Curve DAO (CRV) tokens.
To recover the stolen funds, Curve, Metronome, and Alchemix initiated an initiative offering the hacker a 10% bounty and immunity from legal action if they returned the remaining 90% of the funds. Surprisingly, the hacker agreed to the deal in less than 24 hours and has started returning the stolen funds to the affected projects.
Apart from JPEG’d, the hacker has returned 4,820.55 Alchemix ETH (alETH), equivalent to about $8.8 million, to the Alchemix Finance team and 1 ETH ($1,829) to the Curve Finance team.
This development marks a positive turn of events for the affected DeFi projects, as they recover a significant portion of the stolen funds. The cooperation between the projects and the hacker showcases the potential for amicable resolutions in the crypto space through incentivized options rather than adversarial legal actions.
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