U.S. authorities seize $31M of crypto from Uranium Finance hack
United States law enforcement seized $31 million worth of crypto linked to the 2021 Uranium Finance decentralized finance (DeFi) protocol hack.
According to a recent X post by the United States Attorney’s Office of the Southern District of New York people affected by the hack should now contact law enforcement officials. The reason why victims are encouraged to reach out are the newly-seized funds:
“[Law enforcement seized] cryptocurrency worth approximately $31 million related to April 2021 hack of Uranium Finance. If you believe you have been a victim of this hack, please contact [the Homeland Security Investigations office.]”
The detailsUranium Finance was an automated market maker-based decentralized exchange (DEX) running on the BNB blockchain, which was still known as the Binance Smart Chain at the time. In April 2021, the platform was hacked during an update to a newer version and lost $50 million.
The attackers were able to exploit a vulnerability in Uranium Finance’s smart contracts to swap a single token for almost all the contents in the protocol’s liquidity pool. Smart contracts — introduced by Ethereum — are programs written to operate on blockchains, they act as the backend of decentralized applications (DApps) such as DeFi protocols.
In DEXs, users—called liquidity providers (LPs)—deposit pairs of tokens into liquidity pools to enable seamless swaps. In return, LPs earn a portion of the trading fees or other incentives proportional to their share of the pool.
Liquidity pools allow trades to take place quickly and without excessive slippage on DEX platforms despite their liquidity being limited compared to centralized exchanges. Those pools are also where most of the assets involved in DEX platforms tend to be located.
The news follows Ben Zhou, the CEO of the recently hacked crypto exchange Bybit, suggesting a possible Ethereum (ETH) rollback as a way to recover funds. The comments follow the recent ByBit hack leading to $1.5 billion worth of losses, with what some suggested being the biggest crypto hack so far.
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