SECURITY
SECURITY
SECURITY
P2P coverage market provider Cover Protocol hacked but hacker returns stolen funds
Peer-to-peer coverage market provider Cover Protocol has been hacked, but in a twist on a traditional hacking story, the hacker has not only come forward but has also refunded the funds stolen.
Cover Protocol offers a service in which users can buy cover on anything related to cryptocurrency. Working on a P2P basis, users buy coverage that is staked against other users who essentially bet that the coverage will not need to be paid out.
The hack of Cover Protocol occurred today and involved the hacker exploiting a vulnerability in Cover Protocol’s liquidity mining and farming contract called BlackSmith. The hacker exploited the bug to mint at least $2 million in funds.
just to be clear:
this does not affect the protocol (which is working perfectly), the exploit only affects $COVER price
— Luciano (@Luciano_vPEPO) December 28, 2020
At this point, generally a company would panic, tick off a list of standard responses and write the lost funds off. But several hours after news of the hack was announced, a so-called “white hat” hacker called Grap.Finance claimed responsibility for the attack and said that he had returned all the stolen funds.
According to Coindesk, Grap.Finance returned about $4 million in funds stolen, including 1,400 Ethereum tokens, 1 million DAI tokens and 90 WBTC. The hacker is said to have minted 40 quintillion COVER tokens and sold more than $5 million of them this morning.
On Twitter, the hacker stated that it was up to Cover Protocol to take better care.
Next time, take care of your own shit.@CoverProtocol @chefcoverage https://t.co/ks94ucdoRQ
1. No gains.
2. The Obtained Funds from LP has been returned to COVER.— Grap.finance (@GrapFinance) December 28, 2020
Despite the fact that funds have seemingly been returned in a “white hat” hack, the damage to Cover Protocol’s reputation was real. Binance halted trading on COVER tokens while the price of the cryptocurrency also crashed, down 76% over the last 24-gours. COVER was trading at $878.48 as of 4:32 a.m. EST then dropped to a low of $48.95 as of 3:13 p.m. As of 9:35 p.m. is was trading at $210.75.
For Cover Protocol going forward, the company is floating the idea of issuing a new COVER token through a snapshot of existing balances before the hack took place. “The 4350 ETH that has been returned by the attacker will also be handled through a snapshot to the LP token holders. We are still investigating. Do NOT buy COVER,” the Cover Protocol team said on Twitter.
Image: Cover Protocol
A message from John Furrier, co-founder of SiliconANGLE:
Support our mission to keep content open and free by engaging with theCUBE community. Join theCUBE’s Alumni Trust Network, where technology leaders connect, share intelligence and create opportunities.
- 15M+ viewers of theCUBE videos, powering conversations across AI, cloud, cybersecurity and more
- 11.4k+ theCUBE alumni — Connect with more than 11,400 tech and business leaders shaping the future through a unique trusted-based network.
About SiliconANGLE Media
SiliconANGLE Media is a recognized leader in digital media innovation, uniting breakthrough technology, strategic insights and real-time audience engagement. As the parent company of SiliconANGLE, theCUBE Network, theCUBE Research, CUBE365, theCUBE AI and theCUBE SuperStudios — with flagship locations in Silicon Valley and the New York Stock Exchange — SiliconANGLE Media operates at the intersection of media, technology and AI.
Founded by tech visionaries John Furrier and Dave Vellante, SiliconANGLE Media has built a dynamic ecosystem of industry-leading digital media brands that reach 15+ million elite tech professionals. Our new proprietary theCUBE AI Video Cloud is breaking ground in audience interaction, leveraging theCUBEai.com neural network to help technology companies make data-driven decisions and stay at the forefront of industry conversations.
