DeFi Lender Alchemix Says Vyper Hacker Returned Stolen Crypto

A hacker who was able to destabilize the DeFi ecosystem this week via their exploit has returned the stolen funds after the affected protocols offered a reward.

“We are extremely happy to announce that all funds stolen by the hacker of the Alchemix @CurveFinance pool have now been returned,” Alchemix tweeted.

A hacker who attacked the Vyper programming language a week ago started returning funds on Friday, sending 4,820 Alchemix ETH (alETH), worth $8.3M, back to the Alchemix team’s wallet.

The move started with a test, followed by a return of 1,000 alETH, and finally another send of 3,819.6 tokens.

Bounty for Hacker

The returned assets come after the Curve, Alchemix, and Metronome teams, all of which were affected by the hack, posted a message on Aug. 3 saying that they would not pursue legal action if the hacker returned 90% of the funds by Aug. 6, and offered a bounty of 10% of the funds seized.

The July 30 attack resulted in over $61M drained, including more than $45M stolen from DeFi protocols Alchemix, Metronome, and JPEG’d, plus $25M drained from Curve’s CRV/ETH pool.

"I'm Smarter"

The hacker posted a message on Aug. 4 where they said “I’m refunding you not because you can find me, it’s because I don’t want to ruin your project.”

Ripple Effects

The attack has dominated market action and conversations this week.

Curve’s CRV token plunged after the exploit. The drop in CRV in turn increased liquidation risk of Curve founder Michael Egorov’s $60M in loans which used CRV as collateral across DeFi lending protocols including Aave and Frax Lend.

Egorov’s position also caused borrowers to pull stablecoins from lending platforms for fear of being left with no recourse to retrieve their lent tokens.

Investors have come together to buy up CRV in over-the-counter deals, to shore up the price and ease concerns.

CRV is up 5% to $0.62 since the hacker started returning the funds. It still hasn’t recovered to its pre-hack price of $0.75.

It’s not uncommon for post-hack negotiations to happen in the open over blockchain transactions — the $200M hack of the Euler lending platform in March involved extensive on-chain communications as the blockchain serves as a public message board for hackers and victims alike.