Hack Hits Crypto Platform, Sparking Trader Concerns

arabictrader.com

According to cybersecurity researchers, hackers deposited about $200 million of stolen tokens as collateral on the platform to borrow other cryptocurrencies against them, raising sharp concerns among depositors that this collateral could be worthless.

This triggered a sudden crisis of confidence within the platform, as users rushed to withdraw their funds on a large scale, in what digital asset portfolio manager Pratik Kala described as a mass exodus.

Platform data showed net outflows of about $9 billion since last Saturday, while the total value locked (TVL) on the platform fell by more than a third to reach $17.5 billion.

The incident brought back to the forefront the chronic security risks in the decentralized finance (DeFi) sector, which allows users to trade and borrow without traditional intermediaries, just a few weeks after a similar hack led to the theft of about $280 million from another platform.