Over $160 Million Lost In Crypto Market Maker Wintermute's Exploit

KEY POINTS

Wintermute's CEO said centralized and over-the-counter operations were secure
All the funds were safe other than the $160 million that was lost in the exploit
The attack found its roots in a vulnerability recently disclosed on Profanity

Evgeny Gaevoy, chief executive officer at crypto market maker Wintermute, has confirmed that his platform's operations focused on decentralized finance (DeFi) suffered a $160 million attack.

Gaevoy talked about the hack in a Twitter thread Tuesday, noting that Wintermute's centralized operations remain secure along with over-the-counter operations.

He added that the firm is "solvent with twice over that amount in equity left."

Short communication on the ongoing Wintermute hack
— wishful cynic (@EvgenyGaevoy) September 20, 2022

"If you have a market-making agreement with Wintermute, your funds are safe," he wrote. "There will be a disruption in our services today and potentially for [the] next few days and will get back to normal after."

Hacks and network breaches have become very common in the crypto space, especially with decentralized finance, the part of the crypto industry which works on automated software rather than human intermediaries.

Since Wintermute is one of the biggest crypto market makers in the industry, its executives might pull back on DeFi operations following the hack, Marcus Sotiriou, an analyst at digital asset broker GlobalBlock, said, as per Wall Street Journal.

Additionally, Gaevoy is treating the attack as a white hat attack and has asked the attacker to come forth and return the funds to receive a portion as a bounty.

The executive then revealed that the attack found its roots in a vulnerability recently disclosed on Profanity, a tool that generates crypto addresses where the blockchain-based assets can be stored. While Wintermule successfully blacklisted all of the addresses, one of them was missed.

Gaevoy also confirmed that all the funds were safe other than the $160 million that was lost in the exploit.

"With this particular exploit, it's not possible to do anymore damage," he said. "It's not possible to repeat the attack."

As per earlier reports, popular decentralized crypto exchange GMX witnessed a price manipulation attack on its AVAX/USD trading pair, and the attacker managed to steal $565,000 from its Avalanche market.