JAKARTA - French police have arrested two suspects in connection with the US$9.1 million exploitation of Platypus, and local authorities confiscated 210,000 euros worth of cryptocurrencies.
Platypus is a decentralized financial protocol that allows users to securely exchange, sell, and purchase cryptocurrencies and stablecoins and without intermediaries. This protocol uses smart contracts to regulate market transactions and liquidity, and also provides a safe function of market creation and development of digital assets.
Platypus also offers support for ERC-20 tokens and BEP-20, as well as users can trade stablecoins with a fixed ratio. In addition, Platypus also allows users to borrow and lend digital assets using margin trading and leverage. However, in February 2023, Platypus experienced serious exploitation by unknown actors.
[#Cybercriminalité]La #PoliceNationale met fin à une escroquerie d'ampleur pour un préjudice de 9,5 millions💰sur une société américaine d’échange de cryptomonnaies.Interpellation et convocation en justice de 2 individus👉saisie de 210 000 € en cryptomonnaies#PoliceJudiciaire pic.twitter.com/rKKuG95cWh
— Police nationale (@PoliceNationale) February 24, 2023
According to Platypus, the investigation leading to the arrest was supported by blockchain detective ZachXBT and crypto exchange Binance. The decentralized protocol was hacked in three flash loans carried out by the same perpetrator on February 16.
The attack resulted in the theft of several stablecoins and other digital assets. The first attack resulted in the theft of around $8.5 million in assets. About 380,000 assets were wrongly delivered to Aave v3's contract in the second incident.
As a result of the third attack, around USD 287,000 was stolen and resulted in USD Platypus (USP) stability regardless of the US dollar. The perpetrators used the flash loan method to explore logic errors in the USP solvency checking mechanism in the security collection held by Platypus.
The same flash loan attack method was used by the perpetrator of the Mango Market exploit, Avi Eisenberg, who claimed responsibility for the manipulation of the MNGO coin price in October 2022.
After the exploit, Eisenberg said that "all our actions are legal open market action, using the protocol as designed." Eisenberg was arrested in Puerto Rico on charges of fraud on December 28.
Platypus announced plans to return the funds to affected users on February 23. According to protocol, 63% of the main pool funds will be refunded in six months.
As part of the plan, frozen reminting stablecoins could result in a 78% recovery of funds. "If our proposed proposal to Aave is approved and Tether confirms frozen USDT remining, we will be able to recover about 78% of user funds," the protocol notes, as quoted by Cointelegraph.
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