Crypto Hacker Who Drained $42,000,000 From GMX Goes White Hat, Returns Funds in Exchange for $5,000,000 Bounty
In a stunning turn of events, the crypto hacker who stole tens of millions of dollars from the decentralized crypto perpetuals exchange GMX (GMX) has decided to flip sides and return the stolen funds in exchange for a hefty bounty. This unexpected move has sent shockwaves through the cryptocurrency community, with some hailing it as a potential game-changer in the fight against hacking.
GMX announced on social media platform X that the hacker, who had drained $42 million worth of crypto assets from its Arbitrum (ARB)-based liquidity pool earlier this week, has agreed to return the funds and collect a $5 million reward. The exchange revealed that the hacker exploited a vulnerability in GMX's smart contracts, specifically a re-entrancy attack, which allowed them to gain unauthorized access to the system.
"A potential exploitable amount of $42 million belonging to GLP holders was secured. After payment of a $5 million bounty to the user, the remaining funds are now safely in the GMX Security Multisig," said GMX in a statement. "Contributors are working on a proposed distribution plan for presentation to the GMX DAO (decentralized autonomous organization) and will share more information shortly."
The hacker's attack was first reported by GMX on July 9th, when they revealed that part of the stolen funds had been transferred to an unknown wallet. At the time, the exchange assured users that the exploit was limited to GMXV1 and did not affect its V2 platform, markets, or liquidity pools.
The re-entrancy attack is a type of hacking technique that takes advantage of vulnerabilities in smart contracts by making calls to other contracts before updating themselves. This leaves open the possibility for external malicious contracts to enter and exploit the system.
News of the returned fund sent GMX skyrocketing, with the digital asset trading at $13.36 at the time of writing – a 18.4% increase in the last 24 hours. While this move may be seen as a positive development for the cryptocurrency community, it serves as a stark reminder of the risks associated with investing in cryptocurrencies.
"Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets," cautioned The Daily Hodl. "Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility."
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