Gamma Strategies, a protocol for active liquidity management and market-making strategies on Ethereum, has taken a unique approach to recovering its stolen funds following the discovery of a $3.4 million exploit on January 4th. Security analysis firm Cyvers Alerts reported the loss to be over $4 million, as the attacker created numerous malicious contracts and executed transactions.
Evading Detection: Attacker’s Intricate Moves
The attacker bridged the stolen funds to $ETH as $USDT and promptly swapped them to $ETH to evade freezing. Currently, the attacker holds 1535 ETH, equivalent to around $3.4 million. Typically seen in many hacks, the attacker utilized Tornado cash to obscure the flow of stolen crypto, depositing over $1.65 million into the well-known currency mixer.
Swift Response by Gamma Strategies
In response to the breach, Gamma Strategies promptly took action by temporarily halting vault deposits and allowing only withdrawals. The protocol actively engaged in dialogue with the exploiter’s wallet address, proposing a bounty negotiation to reclaim the lost digital assets.
Gamma assured its community that it had identified the root cause of the attack. By closing deposits for public-facing vaults, the protocol believes it has effectively neutralized any further exploitation, as the attack vector requires an active deposit.
Looking ahead, Gamma outlined its strategic plan. The protocol intends to set all price change thresholds to a safe level, undergo a third-party code review to ensure effective mitigation of this attack before re-opening deposits, and maximize recovery for all affected users.
Despite this unconventional approach, Gamma Strategies expressed remorse to those impacted and pledged to release a comprehensive post-mortem analysis and a proposed remediation plan in the coming days.
As Gamma works towards recovery, the crypto community watches with intrigue, pondering the implications of such unorthodox negotiations in the ever-evolving landscape of decentralized finance. Users are strongly advised to stay vigilant and not invest more than they can afford to lose.
