Nikolas Sargeant
The bot operators have agreed to return 90% of the funds to a specific KyberSwap address on Polygon. In return, they will receive a 10% bounty incentive.
KyberSwap, a decentralized exchange protocol, has successfully retrieved $4.67 million in funds following a security attack. The attack led to a significant loss of nearly $50 million from its concentrated liquidity pools last week.
KyberSwap's Elastic pools were targeted in a hacking incident. The incident impacted funds on blockchains such as Arbitrum, Optimism, Ethereum, Polygon, Binance Smart Chain, and Base. The vulnerability that the attacker exploited was related to the tick interval boundaries in Kyber's concentrated liquidity pools.
The hacker was able to manipulate the boundaries and increase the liquidity. As a result, they could drain the pools and steal over $46 million in digital assets.
Negotiations With Bot Operators
KyberSwap responded to the attack by entering into negotiations with the operators of front-running bots. During the hack, these bots took around $5.7 million in crypto from the protocol's pools on the Polygon and Avalanche networks.
The negotiations were finalized on November 26. In the agreement, the bot operators agreed to send back 90% of the funds to a specified KyberSwap address on the Polygon network. In return, they would receive a 10% bounty as their reward. An official update states that the recovered funds consist of the following:
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361.92 axl-wstETH ($870.5k)
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441.8 WETH ($919k)
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261.5 wstETH (~$624k)
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711,430.9 WMATIC (~$547.8k)
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443,011.6 USDT (~$443k)
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385,630.7 USDC (~$385.6k)
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65,130 USDT (~$65.1k)
Complex Negotiation Process
Negotiating with the front-running bot operators is separate from the ongoing discussions with the main hacker. KyberSwap has shown a willingness to negotiate with the hacker, but progress in these talks is currently limited. In addition, the team has announced a white hat bounty.
KyberSwap has recovered stolen funds from front-running bots. The community has been assured they will assist in law enforcement and cybersecurity efforts to recover user funds from hackers. After the funds are recovered, KyberSwap will continue to support law enforcement and cybersecurity to track down and recover user funds from the exploit attacker.
