GMX Hacker Begins Returning Siphoned $40M After White-Hat Offer

The decentralized trading platform GMX recently faced one of its most significant security breaches. An attacker exploited a vulnerability in the platform’s first version, stealing over $40 million worth of cryptocurrency. However, in a surprising turn of events, the attacker has now started returning the stolen funds . This happened after GMX offered a white-hat bounty worth $5 million and promised no legal consequences. A Costly Breach Hits GMX V1 Earlier this week, the attacker targeted GMX’s original trading system, known as GMX V1, on the Arbitrum blockchain. The hacker took advantage of a weakness in GMX’s OrderBook contract. This allowed the bad actor to change the short trading price of Bitcoin (BTC) and increase the value of the GLP token. The inflated token value was then used to cash out and make a profit. The attack affected several digital coins, including USDC, Frax, Wrapped Bitcoin, and Wrapped Ethereum. In total, the hacker stole over $40 million worth of crypto. As seen in many similar cases , GMX responded quickly to the attack. The team stopped trading and token minting on its V1 system across both the Arbitrum and Avalanche networks. It is important to note that GMX V2 and the platform’s primary token were not affected by the attack. A White-Hat Bounty Turns the Tide To reduce the damage and avoid a prolonged loss, GMX took a bold step. The GMX team sent a message to the attacker using the blockchain. They offered a 10% white-hat reward of $5 million if the stolen funds were returned within 48 hours. The team also promised not to take legal action if the attacker cooperated. Soon after, a reply came through the blockchain, saying the funds would be returned. The attacker kept that promise and sent back two large batches of money. First, $5.5 million worth of Frax was returned, followed by another $5 million. These were sent directly to the GMX deployer wallet. Soon after, the attacker also returned around 9,000 ETH, worth approximately $27 million. This brought the total amount returned close to the full sum stolen. This kind of move by GMX is not unusual in the crypto world and is often used to encourage cooperation after a significant breach. Market Reaction and Project Response After the attack, GMX’s token dropped by over 28%, hitting a low of $10.52. However, once the attacker agreed to return the funds, the price quickly bounced back and went up by more than 13%. The GMX team thanked the attacker on-chain for returning the money and started working to protect the platform going forward. To prevent such hacks from recurring, the team has permanently disabled GLP minting and redemption on Arbitrum. Affected users would be able to close their positions, and leftover funds will be used to compensate those impacted. The post GMX Hacker Begins Returning Siphoned $40M After White-Hat Offer appeared first on TheCoinrise.com .

Source: The Coin Rise