In one of the biggest crypto heists ever, hackers stole more than $600 million from a protocol known as PolyNetwork that lets users swap tokens across multiple blockchains. Assets stolen include $253 million in tokens on Binance Smart Chain, $266 million in Ethereum tokens, and $85 million in USDC on the Polygon network.
Decentralized finance aka DeFi, has surged in popularity in the past few years in the wake of a boom in the development of applications that let people trade, borrow and lend funds to each other without intermediaries. About $80 billion is locked in DeFi applications and with DeFi apps attracting billions in investor funds, they’ve become frequent targets of attacks.
This year, DeFi-related hacks made up more than 60% of the total hack and theft volume of crypto attacks, up from 20% in 2020. At $156 million, the amount netted from DeFi-related hacks in the first five months of 2021 already surpasses the $129 million stolen in all of 2020.
Short Squeez Takeaway: A major criticism of crypto is that its anonymity and ease of use make it suitable for crime, like the ransomware attacks that, by some measures, strike every eight minutes. In June, the FBI got involved to recover some ransom money for Colonial Pipeline. It went against privacy-focused, anti-establishment benefits that some see as crypto’s greatest assets. Looks like Uncle FBI might have to get involved here again.