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Crypto platform Wormhole hit by $320 mln hack

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Hackers stole more than $320 million worth of cryptocurrency from a decentralized finance platform, the fourth-largest cryptocurrency theft on record and the latest incident to shake up the fast-growing DeFi industry.

Wormhole, a website that allows information to be transferred from one encrypted network to another, said on Twitter on Wednesday that it was “exploiting” 120,000 units of ether, the second-largest cryptocurrency.

Wormhole did not immediately respond to Reuters’ request for comment.

London-based blockchain analytics firm Elliptic said attackers were able to fraudulently create the wETH token Elleptic, nearly 94,000 of which were later moved to the ethereum blockchain that powers ether transactions.

Wormhole said in a separate tweet earlier Thursday that it had fixed the holes in the system but was still working to restore the network.

So-called DeFi platforms allow users to lend, borrow and save — often cryptocurrencies — while bypassing traditional financial gatekeepers such as banks.

The influx of cash into DeFi sites reflects the explosion in overall interest in cryptocurrencies. Many investors facing historically low or sub-zero interest rates are attracted by DeFi’s promise of high returns on savings.

However, as DeFi platforms have proliferated, they have become a major hacking risk, with bugs and design flaws in the code allowing criminals to target DeFi sites and deep liquidity pools and launder the proceeds of crime while leaving little trace .

Fraud and theft from DeFi platforms topped $10 billion last year, research on Thursday showed, exposing risks in the fast-growing but mostly unregulated cryptocurrency space.

In August, the hackers behind what may have been the largest digital coin theft ever returned nearly all of the more than $610 million they stole from DeFi site Poly Network.

Hackers have long plagued crypto platforms. In 2018, digital tokens worth about $530 million were stolen from another Tokyo-based Japanese exchange, Coincheck Mt Gox, which collapsed in 2014 after hackers stole $5 billion in cryptocurrencies.

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