Through a collaborative initiative, the operators of automated systems, known as Bot Operators, have agreed to refund 90% of the funds to a designated KyberSwap address on Polygon. In return for their cooperation, they secure a 10% bonus as an incentive.

The security incident targeted KyberSwap’s Elastic pools. This impact extended to assets across multiple blockchains, including Arbitrum, Optimism, Ethereum, Polygon, Binance Smart Chain, and Base.

Through the manipulation of these boundaries, the perpetrator managed to double the liquidity. This action subsequently led to the depletion of the pools, resulting in the misappropriation of over $46 million in digital assets.

KyberSwap Recovers $5.7 Million: Successful Talks with Bot Operators

In response to the security breach, KyberSwap commenced negotiations with the operators of front-running bots. These bots were accountable for extracting around $5.7 million in cryptocurrency from the protocol’s pools on the Polygon and Avalanche networks during the cyber attack.

These negotiations concluded on November 26. During this resolution, the bot operators agreed to return 90% of the funds to a specified KyberSwap address on the Polygon network. As an incentive, they received a 10% bounty for their cooperation.

As per the official update, the recouped funds consist of:

  • 361.92 axl-wstETH ($870.5k)
  • 441.8 WETH ($919k)
  • 261.5 wstETH (~$624k)
  • 711,430.9 WMATIC (~$547.8k)
  • 443,011.6 USDT (~$443k)
  • 385,630.7 USDC (~$385.6k)
  • 65,130 USDT (~$65.1k)

KyberSwap’s Ongoing Efforts and Challenges in the Aftermath of Cybersecurity Breach

Estimated $1M Exploit Prompts Cypher Protocol to Freeze Smart Contract

Negotiations with the hacker remain unresolved. It’s crucial to note that these negotiations differ from the ongoing discussions with the front-running bot operators.

While KyberSwap has expressed a willingness to engage in dialogue with the hacker, there seems to be limited progress in these talks at this juncture. The hacker has also conveyed a similar inclination for discussion. The team has also announced a white hat bounty.

After successfully recovering a portion of the embezzled funds from front-running bots, KyberSwap has reaffirmed its dedication. The commitment is directed towards aiding law enforcement and supporting cybersecurity initiatives. The goal is to actively pursue and retrieve user funds from the individual responsible for orchestrating the exploit attack.

“After the retrieval of users’ funds from the front-run bots, we will persist in aiding law enforcement and cybersecurity efforts to trace and recover users’ funds from the instigator of the exploitative attack.”

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