Crypto Market Marker Wintermute Suffers $160M DeFi Exploit

Crypto Market Marker Wintermute Suffers $160M DeFi Exploit

Wintermute, a leading global algorithmic market maker in digital assets, lost $160M via DeFi hacking. 

Wintermute is one of the most significant players in the worldwide crypto market and manages hundreds of millions of assets and trades worth $5 billion daily. It provides liquidity on over 50 exchanges and trading platforms, including Binance, Coinbase, FTX, and Kraken, and decentralized platforms Dydx and Uniswap.

In recent years, numerous hackers have targeted many decentralized finance platforms and software that aims to provide crypto-based services via their DeFi operations. 

What Is DeFi Security

Decentralized Finance (DeFi) is an emerging financial technology based on secure distributed ledgers similar to those used by cryptocurrencies. It is also called the new financial ecosystem.

This system eliminates bank fees and other financial institutions' charges for using their services. It also does not need any approval for usage. The total value locked in DeFi is more than $56 billion. 

But the downside is that DeFi protocols are highly subject to cyber-attacks, exploits, scams, and arbitrage. Within the first 5 months of 2022, DeFi hacks have amounted to $1.4 billion in financial losses, which is enormous. 

Wintermute Suffers DeFi hack

Wintermute's founder and CEO, Evgeny Gaevoy, has confirmed that the company has lost a nine-figure sum through its DeFi operations. He also claimed that around 90 different assets were stolen.

Among those 90 assets, two of the sums lost were worth between $1 million and $2.5 million. The rest of the 88 assets was worth under $1 million each.

The CEO has also assured that the company remains solvent, its users' funds are safe, and its centralized and over-the-counter services will not be affected by this loss. The firm also clearly stated that if the users wish to recall their loans, they will be able to do it.

The CEO also said that if a user holds a MM agreement with Wintermute, their funds are safe even though some services will be disrupted for the next few days. The firm has further announced that they will happily treat the incident as a white hat attack if the perpetrators are ready to come forward. 

Zachxbt, an on-chain researcher, has also shared the hacker's wallet on Twitter which points to an Ethereum address that currently holds $163 million worth of digital assets. After the address was shared, several crypto users have also interestingly tried to get in touch with the hackers through on-chain messages. 

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