KyberSwap Attacker Moves $2.5M to Ethereum

The individual responsible for the security breach at KyberSwap, a decentralized exchange, initiated significant digital asset transfers. Blockchain analytics firm PeckShield detected the movements, revealing that on February 26, the perpetrator shifted a substantial quantity of assets between blockchains. 

The transactions included the transfer of 798.8 Ether, valued at approximately $2.5 million, from Arbitrum to the Ethereum network. Additionally, the attacker moved nearly $1 million in stablecoins, specifically $826,500 in Dai stablecoin, to a different wallet.

This incident is part of the aftermath of one of 2023’s most notable hacks. On November 23, KyberSwap announced experiencing a “security incident” and urged its community to secure their funds. Investigations revealed that the attackers stole around $46 million in digital assets initially, with further analysis increasing the estimate to nearly $49 million.

Negotiations and Hacker’s Bold Demands

The situation escalated when the hacker, after leaving a message indicating a willingness to negotiate post-rest, reacted negatively to KyberSwap’s negotiation approach. KyberSwap had offered a $4.6 million bounty in return for 90% of the stolen funds. 

However, the hacker criticized KyberSwap’s negotiation tactics and threatened to stall discussions, demanding complete control over KyberSwap and its assets, including temporary authority over KyberDAO, Kyber’s governance mechanism. The hacker set a deadline of December 10, 2023, for KyberSwap to comply with these demands.

In response to the hack and its consequences, KyberSwap took measures to support affected users. On December 2, 2023, the platform announced treasury grants for victims who had not yet recovered their lost funds. The hack’s impact was significant, leading to the company reducing its workforce by half a month following the incident.