- Arcadia Finance gave a Hacker 24 hours to return 90% of $3.5 million stolen or face a manhunt.
- The attack exploited an “arbitrary call vulnerability” in the protocol’s smart contract code.
- Arcadia offered the hacker a 10% bounty if funds are returned, following a common DeFi negotiation tactic.
- The value of Arcadia’s AAA token fell 46% after the hack.
- 2025 has seen over $2 billion lost to crypto thefts across the industry according to DefiLlama.
On Tuesday, Arcadia Finance, a liquidity management platform, warned the hacker responsible for a $3.5 million breach to return the funds or face public exposure and legal action. The incident took place over several hours through more than a dozen transactions, using a flaw in the company’s underlying code.
The Arcadia team sent an onchain message to the hacker’s wallet offering a deal: return 90% of the stolen amount within 24 hours and keep the remaining 10% as a “white-hat bounty.” If the hacker refuses, Arcadia will post a 10% public reward for information leading to their identification and prosecution. The protocol advised users on X to revoke access to its smart contracts as a precaution.
Several crypto security experts attributed the exploit to an “arbitrary call vulnerability,” which allows attackers to run unauthorized code and withdraw more assets than permitted. Similar code flaws have led to hacks in other protocols, with Odos Protocol losing $50,000 and CoW Swap losing $180,000 in past attacks.
While negotiating with Hackers is now common in decentralized finance, not all companies choose this path. For instance, after a $20 million exploit in May, Coinbase—an Arcadia investor—offered a reward for information leading to the attacker’s arrest rather than negotiating directly.
Prior to the breach, Arcadia held over $21 million in user deposits and was one of the fastest-growing projects on Base, a blockchain platform managed by Coinbase. The attack led to a sharp 46% drop in the price of Arcadia’s AAA token, now trading near $0.18.
Industry data from DefiLlama shows crypto thefts have exceeded $2 billion in 2025, making it the worst year on record for such incidents.
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