“I am Smarter Than All of You”; Curve Finance Hacker Paying Back

The Curve Finance exploiter returned the stolen funds while teasing the protocol saying, “I am smarter than all of you.” In an exciting chain of events, a hacker first exploited the protocol for $61 Million last weekend. Interestingly, the exploiter returned parts of the stolen funds after engaging with one of the victims on August 4, 2023.

Exploiter Teases Curve Finance, Saying, “I am Smarter Than All of You.”

The hacker returned 4,820 alETH to Alchemix Finance in a series of transactions. The first iteration was 1 alETH, followed by 1,000 alETH worth $1.7 Million around 9:00 am ET. While another transaction, which followed minutes later, comprised 3,819 alETH worth $6.7 Million.

After returning the amount in alETH, the hacker returned 2,258 ETH to another Alchemix wallet worth $4.2 Million. All these produced amounts, if combined, add up to $12.7 Million. In one of the transactions, the exploiter sent a message which read.

“I saw some ridiculous views, so I want to clarify that I’m refunding you not because you can find me, it’s because I don’t want to ruin your project, maybe it’s a lot of money for a lot of people, but for me, I’m smarter than all of you.”

What Exactly Was the Case With Curve Finance?

On July 30, 2023, hackers stole around $61 Million from Curve Finance, causing mayhem throughout the crypto community. Curve is one of the crypto industry’s biggest decentralized exchanges (DEX), with a total value locked (TVL) of $101.68 Million.

Many Curve pools were also hacked in the act, with PEGD’s pETH/ETH hacked for $11 Million, Metronome’s msETH/ETH for $3.4 Million, Curve DAO for about $24.7 Million, and Alchemix’s alETH/ETH for $22.6 Million. Till now, only a significant fraction of Alchemix’s exploits have been returned.

The older version of the Vyper compiler contract programming language in Curve Finance’s protocols had a bug. This bug led to the security failure for the exploited Curve’s liquidity pools. Considering the previous hacks on the crypto industry, the value of this particular hack was comparatively small. Hackers only stole about 4% of the protocols TVL.

Since the news of returning the fund broke out, CRV has gained significantly in the last 24 hours. The investors also rejoiced with the hope that most of the stolen assets would be returned to the victims. It cannot be confirmed if every penny lost would be replaced, but there’s hope nonetheless.

On August 4, 2023, Curve Finance offered a 10% bounty for returning the stolen asset if they were returned by August 6, 2023. When the news of the exploit broke out, the CRV token’s price fell by around 31%. Also, it put the decentralized finance (DeFi) sector in the crosshairs for its promised security.

Curve Founder Caught in CrossFire

The stark fall in CRV’s price put its founder Michael Egorov’s loans secured with $168 Million CRV to the brink of liquidation. If the return of funds never started and Egorov had to liquidate, it would have created another set of problems. Protocols like Aave would have incurred tens of millions of bad debt.

Egorov sold around $42 Million of his CRV stash to avoid total liquidation including Justin Sun’s over-the-counter deal to pay off loans. Tron’s founder was excited to help Curve and assert its commitment to supporting the community. At the same time, it is trying to empower decentralized finance.