Usually when a hacker steals money from a crypto exchange they are never found and the money is never returned, no matter how hard the police try to investigate. With the proper anonymization techniques the hacker can disappear like a ghost. However, in what could be a crypto first, the dForce hacker who stole $25 million of funds has returned almost all of the funds, aside from $700,000 that they lost due to conversion fees when they were laundering the money. The hacker did this because their information was revealed to the Singapore police.
The dForce hack occurred this weekend as discussed in a Crypto.IQ article from yesterday. dForce is a decentralized finance (DeFi) platform, and dForce was compromised via a reentrancy attack on the ERC-777 token imBTC, which was inherently flawed and vulnerable.
What happened is the 1inch Exchange somehow obtained the hacker’s IP address and other critical metadata. It could perhaps be speculated that the 1inch Exchange was being used by the hacker to launder the stolen crypto, although this hasn’t been confirmed at this time.
In any case, 1inch Exchange is friends with dForce, and sent the hacker’s IP address and metadata to the Singapore Police. This apparently scared the hacker straight, and $24.3 million of funds have been returned to dForce.
Indeed, in Singapore chewing gum is literally a criminal offense in some cases, so stealing $25 million would probably lead to an unimaginably intense punishment.
Unfortunately for the hacker, $700,000 was lost due to conversion fees when laundering the crypto. So, the hacker still owes $700,000 and therefore is still likely in very hot water. Also, the hacker will still be held accountable for the original act of theft, since returning the stolen property doesn’t nullify a theft under the law.
Zooming out, this is an incredibly unique case in the crypto space, since it is unheard of for a crypto exchange/platform hacker to actually be caught and return the funds. Perhaps this story will give hope to crypto exchanges and platforms dealing with similar issues in the future.