Poly Network Offers Chief Security Officer Role to Hacker That Stole $600M

While devastating, hacks like Poly Networks can actually strengthen the ecosystem because they expose vulnerabilities, according to Michael Tant, an analyst at Inside and an angel investor.

article-image
share

key takeaways

  • “Mr. White Hat” has returned roughly $400 million of the stolen assets, but Poly Network has offered the hacker a $500,000 bounty if they give back the rest of the stolen funds
  • The crypto market capitalization touched $2 trillion since the massive cyberattack last week

In a strange turn of events, Poly Network has offered the hacker who exploited its protocol to steal $611 million in crypto a job as chief security officer.

Poly Network offered the hacker (or hackers), dubbed “Mr. White Hat”, a role as the protocol’s chief security advisor on Tuesday. “Mr. White Hat” is a common reference for a hacker who receives a bounty or award for exposing a system’s security flaws. 

On August 10, “Mr. White Hat” breached the security of DeFi exchanges like Polygon, Binance Smart Chain and Ethereum and stole $266 million in Ethereum, $253 million in tokens on Binance Smart Chain and $85 million in USDC on Poly Network.

In response, Poly Network urged crypto exchanges to “blacklist tokens” that were connected to the alleged hacker. Poly Network tweeted following the massive cybercrime that the company would “take legal action” and “urge[d] the hackers to return the assets.”  

On August 12, Poly Network offered up $500,000 to the hacker to return all funds. The hacker declined the bounty the same day, but has since returned $400 million of the stolen assets. 

Poly Network offered the hacker the chief security advisor role so that “Mr. White Hat” could continue “contributing to security advancement in the blockchain world,” according to a Medium post. Poly Network also doubled down on their offer of a $500,000 bounty if the hacker returns the remaining stolen funds.  

Following the hack, addresses (later proven to be connected to the hacker) responded publicly via a series of encrypted messages through crypto exchanges. On returning the stolen assets, they responded, “That’s always the plan! I am _not_ very interested in money! I know it hurts when people are attacked, but shouldn’t they learn something from those hacks?” 

While devastating, hacks like Poly Networks can actually strengthen the ecosystem because they expose vulnerabilities, according to Michael Tant, an analyst at Inside and an angel investor. “Now that the hack has happened and funds are being sent back, we can catch it [next time]. It’s one less way the protocol can theoretically be hacked,” he told Blockworks.

Despite the tumultuous journey for Poly Network, crypto markets have not been significantly impacted by the security breach. Ethereum is up 0.20% over the past seven days. Bitcoin has dipped less than 1% over the past week as of press time. Similarly, the crypto market capitalization has since touched $2 trillion the following Monday.

“You almost would rather have those vulnerabilities exposed earlier when it’s $600 million instead of 10 years when it’s $600 billion,” Tant said. “It’s not to say that hacks are bullish, but it is to say that DeFi is still very early. People are still writing new code. It’s probably good to get the bad code out of the way now so that people can keep building.”

Want more investor-focused content on digital assets? Join us September 13th and 14th for the Digital Asset Summit (DAS) in NYC. Use code ARTICLE for $75 off your ticket. Buy it now.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

5.png

Research

This months PPGC covered four main areas. Firstly, is a discussion around PIP-48 which is an introduction of Path Based Storage Schemes (PBSS). Secondly is the a implementation of DNS Discovery which enhances node synchronization by providing secure and efficient peer connections. Thirdly an update on PIP-47 Delayed for Security. Lastly, an overview of the Season 1 Transparency Report for the Polygon Community Grants Program.

article-image

Pro-crypto Republican Bernie Moreno beat anti-crypto Democrat Sherrod Brown in Ohio’s senate race

article-image

Bitcoin markets soared just after 10 pm ET on election night, briefly surpassing $75,000

article-image

Largely seen as pro-crypto, Donald Trump is set to once again take the White House

article-image

Moreno was leading Brown 50.6% to 46% as of 11:30 pm ET, when 91% of votes had been reported

article-image

BlackRock’s Samara Cohen said “a fair amount of plumbing” is needed to unlock the ability for pensions and endowments to gain BTC exposure