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Poly Network hack exposes DeFi flaws, but community comes to the rescue

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Although it seemed crypto hacks were on the decline, just recently, the market bore witness to one of the largest-ever attacks in the young history of decentralized finance (DeFi), wherein an unknown hacker was able to exploit a loophole in cross-chain protocol Poly Network’s digital framework, thereby walking away with a cool $610 million from three separate blockchains.

The Poly Network is a collaborative project helmed by Ontology, Neo and Switcheo. It seeks to foster a “heterogeneous interoperability protocol alliance” integrating blockchains into the larger cross-chain ecosystem. Thanks to its infrastructure, the protocol allows users to swap tokens across different blockchains seamlessly.

Further elaborating on the development, Poly Network’s core developer team has revealed that the attack resulted in roughly $273 million from Ethereum, $85 million in USD Coin (USDC) from the Polygon network, and $253 million from the Binance Smart Chain being compromised. Furthermore, sizable amounts of renBTC, wrapped Bitcoin (wBTC) and wrapped Ether (wETH) were also lost as part of the exploit.

In regards to how the hack happened, Anton Bukov, co-founder of DeFi aggregator 1inch Network, told Cointelegraph that one of Poly Network’s sub-systems — designed to be capable of forwarding users’ smart contract interactions among different blockchains — turned out to be faulty, adding:

“The hacker bridged fake transaction interactions on one chain to make the system contract on another, transferring ownership rights for the assets’ vault to the hacker’s public key. Poly Network’s developers and auditors didn’t notice the vulnerability, allowing for multiple arbitrary user calls via a smart contract that has many privileges.”

Putting on a white hat

Providing his thoughts on the matter, John Jefferies, chief financial analyst of CipherTrace, told Cointelegraph that this incident has been especially interesting compared to any DeFi hacks of the past, which typically used a form of flash loans and arbitrage to exploit a smart contract and steal funds, adding:

“The hacker essentially found an exploit that allowed him to bypass the private keys and have the contract just send the funds to himself. In all the swapping the hacker has done in an effort to obfuscate their trail, it appears the hacker had at one point reused a wallet that already had previous transactions with some prominent exchanges that would have identifying KYC information on him.”

Also, Jefferies is not entirely convinced of what the hacker’s intentions were, even though all of the stolen funds are now back where they belong. “It is unlikely that a white hat would have taken the steps to attempt to obfuscate the funds trail if they had always intended on returning the money,” he opined.

In a strange yet interesting turn of events, soon after the breach, the Poly Network hacker conducted an Ask Me Anything-style of self-interview, using embedded messages in Ethereum transactions. When asked about why the Poly Network, in particular, was chosen as a target, the hacker answered “cross chain hacking is hot,” adding that they spent a good amount of time trying to identify vulnerabilities on the network to exploit.

Not only that, the hacker claimed that the plan was never to keep the $610 million, but rather expose the vulnerability to the masses before Poly Network’s developers could secretly fix the bug. “I would like to give them [Poly Network] tips on how to secure their networks, so that they can be eligible to manage a billion [dollar] project in the future.” He went on to further add:

“When spotting the bug, I had mixed feelings. Ask yourself what would you do if you were faced with such a fortune. Asking the project team politely so that they can fix it? Anyone could be the traitor given one billion. I can trust nobody! The only solution I can come up with is saving it in a trusted account.”

The funds are back

Poly Network released a statement on Thursday announcing that all $610 million of the funds had been transferred to a multisig wallet that is under its purview along with the hacker. The only remaining tokens include $33 million worth of Tether (USDT), which were frozen immediately following news of the attack.

The Poly Network hacker started off by returning a significant portion of the stolen funds to the cross-chain DeFi protocol. Indeed, a little over a day after the event, CipherTrace confirmed that at least $265+ million had been returned to Poly Network in the form of $1 million in USDC; $256.2 million mostly via Bitcoin BEP-2 (BTCB), Binance pegged-Ether and Binance USD (BUSD); $2.637 million in Binance Coin (BNB); and $3.4 million in Shiba Inu (SHIB), renBTC and Fei.

From the very beginning, the attacker claimed to be willing to return the entirety of the stolen funds — a promise that was delivered this past Thursday — claiming that the intention was to teach Poly an expensive lesson about its security flaws.

However, Tom Robinson, chief scientist at blockchain analytics firm Elliptic, is of the view that the change of heart might have been due to the fact that the hacker found it extremely difficult to launder/cash out the stolen assets due to the transparency of the blockchain.

Sebastian Bürgel, founder of Ethereum-based data privacy protocol HOPR, told Cointelegraph that while thefts are never a good thing, he thinks that it’s impressive that the DeFi community was able to come together — from Tether freezing $33 million worth of USDT to OKEx and Binance lending a helping hand in monitoring the siphoned funds — to prevent the hacker from withdrawing or exchanging any of the involved assets, adding:

“Hopefully, it will encourage a greater focus on security and auditing. DeFi enthusiasm is infectious, but it’s important to remember that there is huge value at stake. The desire to move quickly can’t trump security.”

“No, thank you,” says “Mr. White Hat”

After determining the hacker’s motives to be completely clean, a spokesperson for the Poly Network said that the company was willing to offer the individual — whom the company dubbed “Mr. White Hat,” — a $500,000 bounty via a message that read, “We will send you the 500k bounty when the remaining funds are returned except the frozen USDT.”

Surprisingly, the hacker politely refused, stating that he never responded to the offer. “I will send all of their money back,” he said, signing off.

Related: How do DeFi protocols get hacked?

With all of the funds back in place — bar the aforementioned frozen USDT — it appears as though the largest hack in decentralized finance history has finally come to a close. And though the hacker’s identity continues to remain a mystery, Chinese cybersecurity firm SlowMist recently released an update claiming that its security team had been able to identify the attacker’s email address, IP address and device fingerprint.

Hopefully, this episode serves as a stern reminder of how security should always be of supreme importance when laying the foundation of any project, regardless of its technological proposition. Therefore, it will be interesting to see how startups and other firms operating within DeFi continue to evolve and upgrade their existing security setups because the next time around, the hacker may be unwilling to return the money.


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Source: https://cointelegraph.com/news/poly-network-hack-exposes-defi-flaws-but-community-comes-to-the-rescue

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What Did Jordan Peterson And Maxime Bernier Say About Bitcoin And The Austrians?

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The Bitcoinization of Jordan Peterson is a go. The famed psychologist and media personality had a Canadian politician as a guest in his podcast and couldn’t help but touch on the subject. And Maxime Bernier was right there with him, which lead to a brief discussion about Austrian Economics. Even though both Peterson and Bernier are controversial figures, they’re as mainstream as it gets. This isn’t Bitcoiners preaching to the choir.

Related Reading | That JPMorgan Report On El Salvador Doesn’t Even Mention The Lightning Network

As if he was walking through a minefield, Jordan Peterson approached the subject carefully and in a non-comital way:

“The cryptocurrency types. You know? The people who’re pushing Bitcoin in particular, make the extraordinarily radical claim that it would be better for everyone if the entire business of money was taken out of the hands of government permanently. And that’s essentially what Bitcoin allows. At least at the present time.”

Surprisingly for everyone not familiar with the politician, Maxime Bernier agrees and flashes his Austrian Economics credentials. Peterson follows the bread crumbs and asks him about that, Bernier answers:

“I believe, yes. The cycles that we have, the ups and downs in the economy, is because of the Central Bank. Money is everywhere, and if you create too much money out of thin air, you’ll have inflation. And distortion in the economy. And the boom and bust that we have. So, I 100% agree with Mises, Rothbard, Hayek, and these economists.”

For more information and Austrian Economics’ concepts, check The Bitcoinist Book Club’s analysis of “The Bitcoin Standard.”

BTCUSD price chart for 09/18/2021 - TradingView

BTC price chart for 09/18/2021 on FTX | Source: BTC/USD on TradingView.com

So, Who’s Maxime Bernier?

In the video’s information box, Jordan Peterson ’s team informs:

“In this episode, Dr. Peterson is joined by the Honorable Maxime Bernier, leader of the People’s Party of Canada (PPC), former MP of Beauce (2006-2019) and candidate for the Prime ministership of Canada.”

In 2017, Maxime Bernier tried to win the head of the Conservative Party. He failed. The next year, they removed him from the Official Opposition shadow cabinet. Later that year, he founded the People’s Party of Canada. In 2019, the novel party didn’t do so well, but, cut to 2021 and the People’s Party of Canada is suddenly on everyone’s radar.

The National Post explains the main reason:

“With protests against COVID-19 public-health measures growing, Bernier has tapped into a deep well of resentment about the way Canadians have had to live for the past 18 months, and fears about what the next months will look like.”

Apparently, the People’s Party of Canada is en route to get 6% in the next  Canadian elections. If it happens, they’ll become one of the major political forces in the country. The Washington Post explains the situation:

“Six percent is not an impressive figure unto itself, and it’s likely the party will not win a single parliamentary seat. Yet the Green Party won zero seats and 4.3 percent of the popular vote in the 2004 general election and was nevertheless swiftly institutionalized by the media. Proclaimed one of Canada’s “major parties.”

What Does Jordan Peterson Think About Bitcoin?

The Canadian psychologist learned from the best. He had four of the brightest minds in the Bitcoin space explaining everything to him, and he got most of it on the first try. We at Bitcoinist broke down the episode, took notes, and transformed them into this analysis: Part 1, Part 2. The most amazing quote was this one:

Related Reading | Bitcoin Gains Steam With U.S. Politicians, Will It Become A National Movement?

After listening carefully, Peterson synthesizes those ideas in a quote for the ages. “Whatever energy is expended in the production of Bitcoin and the maintenance of the system should be more than recouped by the increased efficiency of every system that uses Bitcoin as a transactional device.” Boom! If we take that into account, “There’ll be a net energy gain and not a net energy loss if you calculated it across the entire system.”

That conversation sparked the Maxime Bernier one. One of Canada’s biggest stars talking about Bitcoin in good light with a major political candidate. Who would’ve thought?

Featured Image: Screenshot from the video | Charts by TradingView

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Source: https://bitcoinist.com/what-did-jordan-peterson-and-maxime-bernier-say-about-bitcoin-and-the-austrians/?utm_source=rss&utm_medium=rss&utm_campaign=what-did-jordan-peterson-and-maxime-bernier-say-about-bitcoin-and-the-austrians

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Shiba Inu coin (SHIB) pumps and sees $2 billion traded after Coinbase listing

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Shiba Inu coin (SHIB) believers were in for a surprise Friday morning after Coinbase, one of the world’s largest and most regulated crypto exchanges, listed the memecoin on its platform.

“SHIB is now live on Coinbase and in the Coinbase iOS and Android apps. Coinbase customers can log in now to buy, sell, convert, send, receive or store SHIB,” the exchange said in a tweet.

The move is slightly uncanny for Coinbase, which has historically taken a regulatory-first approach towards listing cryptocurrencies on its platform. The firm also went public earlier this year—holding it accountable to even more regulations and liasions now that public money is involved. 

Coinbase is, however, starting to make moves to appeal to a broader base of investors. It raised $2 billion in a debt note offering this week to expand its product offering, and has listed ‘altcoins’ at a faster rate this year.

“One of the most common requests we hear from customers is to be able to buy and sell more cryptocurrencies on Coinbase. We announced a process for listing assets, designed in part to accelerate the addition of more cryptocurrencies,” stated Coinbase in a release. “We are also investing in new tools to help people understand and explore cryptocurrencies,” it added.

Such moves help bolster the rising coffers of Coinbase: It earned over $1.2 billion in revenue in Q1 2021, but is arguably looking for more.

Shiba Inu frenzy

Inspired by the breed of cutesy Shiba Inu dogs which find their place in the online meme community, Shiba Inu was launched in August 2020 by a group of anonymous developers looking to emulate the success of Dogecoin.

The token didn’t instantly catch on among the masses, but incessant hype—partly driven by the antics of Tesla CEO Elon Musk and his Dogecoin fascination on social app Twitter—saw SHIB rise 15,067,601% from its November lows. 

That’s enough to turn every $1,000 invested in the token to a staggering $150 million as of today, and even more at SHIB’s all-time high of $0.00003791 in May 2021.

Meanwhile, SHIB pumped nearly 35% to a daily high of $0.00000932 after yesterday’s listing. Over $412 million worth of the token exchange hands on Coinbase at press time, and over $2 billion traded across all crypto exchanges combined.

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Source: https://cryptoslate.com/shiba-inu-coin-shib-pumps-and-sees-2-billion-traded-after-coinbase-listing/

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The Head of Diem wants you to trust Facebook, but is he fighting a losing battle?

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Head of “Facebook Coin,” David Marcus discussed the up-and-coming Novi wallet, saying users do not need to worry about security or privacy.

However, Facebook’s reputation on both counts is somewhat in the gutter. As such, Marcus may well be trying to achieve the impossible in convincing people otherwise.

Nonetheless, in his latest interview, he states his case pleading with people to give Diem a chance.

Facebook Wants Your Trust

Speaking to Yahoo Finance, Marcus wanted to reassure users that Diem, and the Novi wallet, are safe to use. What’s more, he said that no data will be used for ad targeting or any purpose related to the Facebook advertising model.

Marcus points out that from the onset, the Diem infrastructure was designed in such a way to avoid “commingled” financial and social data. That way, there is no controversy over a single entity holding data across different categories on its users.

“And, you know, basically, the way that we’ve designed this– and it actually took us a lot of effort to build it the right way– is that your financial data is not going to be commingled with your social data.”

Diem is looking to disrupt the overseas retail remittance market. Marcus said it’s a huge market that is ripe for the picking. With that, he hopes that people will give Diem a shot. And once they do, the firm will do its utmost to overturn people’s skepticism.

Although, given the scandals of the past, he admits that this is a long play.

“Over time, we plan to earn people’s trust so they give us a shot for other things over time. But it’ll take time and I’m cognizant of that.”

User Comments Discussed

When it comes to social media dominance, Facebook is up with the best of them. Despite being known as a platform for boomers, it still pulls in 2.9 billion monthly active users. Meaning, Diem’s potential userbase is bigger than anything that exists in crypto right now.

Based on trend analysis, it seems as though there’s no stopping its growth, with India, the United States, and Brazil ranking as the countries with the highest number of users.

Facebook monthly active users
Facebook monthly active users. Source: statista.com

Nonetheless, on the matter of trusting Facebook and Diem, the (so far) 16 comments on this article are all overwhelmingly against. While that may not represent wider views, it’s still telling that 100% of comments slam the idea of trusting Facebook with financial data.

One user wrote of his concerns of political bias and censorship, which together make an untrustworthy “combo.”

In context; Facebook has a history of political activism as well as working with the democrat government censoring free speech. Not a trustworthy combo.

And despite Marcus’ explanation of separating financial and social data, another user remained skeptical of the claim by saying:

“And now they track your every purchase. Or at best gather stats for the retail business selling them data on what and where people are buying.

All in all, it’s understandable that Facebook wants to pivot into finance and crypto. But changing hearts and minds will not be easy to do.

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Source: https://bitcoinist.com/the-head-of-diem-wants-you-to-trust-facebook-but-is-he-fighting-a-losing-battle/?utm_source=rss&utm_medium=rss&utm_campaign=the-head-of-diem-wants-you-to-trust-facebook-but-is-he-fighting-a-losing-battle

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