DeFi Bridge Warmhole Restores $320 Million Worth of Stolen Funds, Here’s What Unfloded

By Bhushan Akolkar
February 4, 2022 Updated February 4, 2022
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Earlier on Wednesday, February 2, DeFi bridge protocol Warmhole announced that the platform was hacked as hackers managed to steal a staggering 120 wETH worth $320 million. Warmhole is a DeFi blockchain bridge between Ethereum and Solana allowing users to swap SOL for other cryptocurrencies.

However, the firm’s leaders have said that they have restored all the stolen funds, which comes as a big sigh of relief for the users of the platform. Warmhole noted:

All funds have been restored and Wormhole is back up. We’re deeply grateful for your support and thank you for your patience.

Warmhole has yet to release a detailed report on how they have restored the stolen funds as well as explaining the events of the hacks. Bloomberg report notes that Jump Trading Group, which helped develop Wormhole, has managed to pour the money back into the users’ wallets.

This is one of the classic examples that things in crypto can be fixed fast and soon. Furthermore, as per London-based blockchain analysis firm Elliptic, Warmhole has offered $10 million to the hackers to return the funds and exchange the knowledge regarding existing loopholes on the platform.

Warmhole and other popular DeFi platforms provide users with Guardian accounts which are considered more secure digital wallets as they come with two-factor authentication. Elliptic wrote:

The exploit resulted from Wormhole’s failure to validate guardian accounts — allowing the attacker to mint 120,000 ETH out of thin air. This adds to the more than $2 billion in direct losses suffered by DeFi services due to hacks and exploits.

Jump Trading Group Comes to the Rescue

Jump Trading acquired Warmhole developer Certus One last year to overtake the platform operations. Bloomberg notes that Jump’s participation in the platform shows that it has ambitions beyond crypto trading.

With Warmhole, Jump seems to emerge as a major infrastructure provider for the next generation of the crypto markets. This hack will be an eye-opener and Jump Trading still has a lot to do on their part of infrastructure security. Kyle Samani, co-founder of Multicoin Capital, which manages a hedge fund and venture fund in the crypto space said:

I think it’s because Jump believes bridges are of paramount importance to the long-term success of the crypto ecosystem. Given Jump’s background in providing liquidity and HFT in traditional markets, they have a unique perspective on how to think about the importance of bridges.

Kyle further added: “Given the size of investment they have and continue to make, and the willingness to cover 100% of this loss, I assume they intend to profit from Wormhole somehow in the long run.”

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

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