- Tether will donate $127.5 million to help Solana-based exchange Drift Protocol recover $286 million stolen by suspected North Korean Hackers.
- The aid package requires Drift to transition its primary settlement asset from Circle’s USDC to Tether’s USDT, bringing its users onto USDT-based trading.
- A recovery pool funded by Tether and other partners will compensate users via a special token representing their claim.
- The protocol will relaunch after undergoing security audits by OtterSec and Asymmetric.
- The hack occurred after attackers built relationships with the team and tricked multisig signers, highlighting ongoing DeFi security woes.
Stablecoin giant Tether announced a recovery plan in April to help decentralised exchange Drift Protocol after hackers drained over $286 million from the Solana-based platform. Investigators have since accused North Korean cybercriminals of being behind the heist.
However, the $127.5 million deal came with a critical condition. Consequently, Drift will use Tether’s USDT as its main stablecoin instead of rival Circle’s USDC, bringing more than 128,000 users onto USDT-based trading. “The recovery plan presents a clear, revenue-driven model that prioritises Drift users from day one,” Tether said.
The exchange will use the cash, supplemented by an additional $20 million from unnamed partners, to fund a recovery pool for user losses now totaling $295 million. Meanwhile, it is working with law enforcement and blockchain forensics to recover the stolen money.
Drift said a special token will be issued to those who lost funds, representing a transferable claim on the recovery pool. Furthermore, the protocol will relaunch after being audited by two security firms: OtterSec and Asymmetric.
The hackers gained access after months of building relationships with the Drift team and tricking multisig signers into handing over admin control. This incident adds to recent DeFi security concerns, as criminals also hit Balancer for $128 million earlier this year.
This week, criminals targeted popular bridge Hyperbridge, minting $1.2 billion in counterfeit crypto but only extracting $237,000. Cybersecurity experts stress that DeFi protocols must improve their security measures.
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