Weekly Recap: Wintermute Falls Victim to Hack Amid Do Kwon Bolo
Interpol May Step in as Officials Claim Do-Kwon is On The Run
South Korean prosecutors have alleged that Terra Founder Kwon Do-Hyung is refusing to cooperate with their investigations.
Prosecutors have asked Interpol to issue a red notice against the TFL founder saying he’s “obviously on the run.” They are also working to revoke his passport as it appears Do-Kwon does not plan to submit to questioning. Korean news outlet Yonhap News Agency revealed this in a report on Sunday, September 18.
A few weeks ago, the TFL founder alongside other Terra executives received an arrest warrant for his role in the Terra crash. After reviewing the Terra case, it appears the officials classified the network’s tokens as securities. Hence Do-Kwon is currently facing fraud charges.
When he received the warrant, Do-Kwon was residing in Singapore. He later said in a tweet that he had nothing to hide and was in full cooperation with the officials. On Saturday, however, Singapore’s police released a statement saying Do-Kwon had left.
The Reserve Bank of India Plans a Phased Implementation of the Digital Rupee
In a speech at the Global Fintech Festival in Mumbai, Shaktikanta Das, Governor of the Reserve Bank of India (RBI), revealed the RBI’s plans for a CBDC.
Das noted that the financial institution is set to issue digital rupees in the current fiscal year. According to reports, the nation will move forward with a phased implementation of its digital currency. The RBI is reportedly working to incorporate the digital rupee into the wholesale and retail sectors.
Governor Das also commented on the expansion of the crypto industry. According to him technology, innovation, and fintech have joined forces to push the industry forward. The RBI is keen to encourage innovation for fintech businesses, however, consumer protection remains a priority.
White Hat Hacker Saves Arbitrum From Massive ETH Losses
On Tuesday, anonymous white hat hacker “Riptide” uncovered a multi-million dollar vulnerability in the bridge linking Ethereum and layer-2 scaling solution Arbitrum.
The hacker published a medium post explaining the exploit that could have occurred. According to his report, a malicious actor could have taken advantage of an initializing function to set their own bridge address. Following this as users bridged funds to Arbitrum, the hacker could drain off all incoming ETH deposits using the depositEth() function.
Riptide further noted that the hacker could target large ETH deposits to go undiscovered for longer. Alternatively, they could have drained off every deposit that came through the bridge or waited to "just front-run the next massive ETH deposit.”
Whatever the method, the hack would have caused losses scaling millions of dollars worth of ETH. Arbitrum rewarded Riptide with a 400 ETH bug bounty, roughly $524,000. While the ethical hacker was thankful they later noted on Twitter they should have received a max bounty, worth about $2M.
Market-Maker Wintermute Loses $160M In an Attack
UK-based crypto market maker Wintermute fell victim to a hack on Tuesday. The attack drained the platform of various assets worth $160M, according to founder and CEO Evgeny Gaevoy.
Gaevoy outlined details of the breach in a Twitter thread. According to his report, the hacker gained access via a vulnerability in private keys generated by the well-known Profanity vanity key generator. Blockchain security firm CertiK confirmed this noting that the hacker was able to redirect funds using the stolen keys.
Etherscan data revealed that the hacker made off with over 70 different tokens including $61,350,986 worth of USD Coin (USDC). They also stole 671 Wrapped Bitcoin (wBTC), which is roughly $13,030,061, and $29,461,533 Tether (USDT).
According to Gaevoy, the platform’s over-the-counter and centralized finance operations were not affected. Also, user funds are reportedly secure as the Wintermute is solvent with twice the stolen funds in equity left. The company sent out a message to the hacker later, offering a $16M bug bounty in exchange for the loot.
GitHub Unbans Tornado Cash
Software hosting platform GitHub has lifted its ban on privacy protocol Tornado Cash’s open-source repositories.
In August, the US Treasury Department’s Office of Foreign Assets Control OFAC sanctioned the platform. The officials brought up the crypto mixer’s role in various money laundering operations as a reason for the blacklisting. Following this, GitHub took action against the platform taking down its page on the website.
However, the OFAC recently confirmed that its sanctions do not extend to Tornado Cash’s code. Indeed, US residents have the right to view and share the platform’s code online. Thus, GitHub has retraced its steps, Ethereum developer Preston Van Loon announced this in a tweet on Thursday.
The Microsoft-owned software platform lifted the ban but has not yet restored full functionality. Tornado Cash’s code is only available in read-only mode at the moment.
Russian Authorities Give the Green Light for Crypto Cross-border Settlements
According to a Thursday release from a local agency, under a new bill, the Russian Central Bank has legalized crypto for cross-border payments. Deputy Minister of Finance Alexei Moiseev claims the Bank of Russia and the Ministry of Finance agreed to finalize the bill.
Moiseev reports that the document addresses ownership and potential applications of cryptocurrency for Russian residents. Russia’s negative stance on crypto caused citizens to open crypto wallets externally, Moiseev noted. Hence the nation will open its doors to crypto and provide citizens with access to crypto wallets.
Existing sanctions may have contributed to the move as well. Since its invasion of Ukraine Russia has received a slew of financial sanctions impeding its economy and related operations. The Central Bank and Ministry of Finance are turning to crypto to facilitate cross-border transfers.
