Cypher Protocol, a prominent decentralized futures exchange operating on the Solana blockchain, has taken decisive measures to address an estimated $1 million exploit. The incident has not only prompted a halt in its smart contract operations but has also raised concerns within the cryptocurrency community.

Security Incident Alert and Investigation

On the 7th of August, Cypher Protocol swiftly notified its vast network of 13,500 followers on X (formerly known as Twitter) about a security incident it had encountered. The exchange’s response to this event was to immediately freeze its smart contract in order to safeguard user interests.

Cypher Protocol’s response to the exploit includes a comprehensive investigation into the root cause of the breach. Furthermore, the platform has taken an unprecedented step by initiating negotiations with the hacker responsible for the attack. The objective of these negotiations is to potentially recover the stolen funds and restore trust within the community.

Wallet Suspected of Exploit and Unusual Transactions Post-Exploit

Data extracted from Solana blockchain explorer Solscan indicates that the wallet believed to be linked to the exploit managed to pilfer around 38,530 Solana tokens, accompanied by $123,184 USD Coin. This unauthorized acquisition resulted in a total gain of approximately $1,035,203. The audacity of this act became even more evident as the wallet made an audacious move post-exploit

Immediately following the breach, the suspected wallet executed a series of transactions. The most significant among them was the transfer of 30,000 USDC to Binance’s Solana USDC address, under the label “kiing.sol.” This transfer is being speculated as an attempt to liquidate the stolen assets through a well-known exchange.

A Community’s Response and Evasion Attempts

The Cypher Protocol exploit ignited a strong reaction within the cryptocurrency community. Individuals affected by the breach employed an innovative approach by sending Non-Fungible Tokens (NFTs) to the attacker, imploring the return of the ill-gotten gains.

One NFT message reads,

“Seriously though, you used Binance and KuCoin to fund and to try and get 30k out. People will find you. Please do the right thing and give the rest back.”

Another message was more direct, stating, “Give it back, you shitlord.”

Remarkably, as of now, the suspected hacker has refrained from transferring any of the Solana-based funds to the Ethereum network. This decision might be strategic to avoid potential tracking mechanisms across different blockchains.

Interestingly, this security breach occurred during Cypher Protocol’s mtnDAO hacker house event, which it co-hosts alongside fellow Solana protocol Marginfi. Notably, Marginfi asserted its independence from Cypher Protocol and clarified that the breach did not affect its operations.

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