Macauley Peterson

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        <ul>
                <li>BadgerDAO smart contracts remain paused following website exploit that cost users $120 million, as community pursues investigation and reaches out to the thief in hopes of striking a deal</li>
                <li>BitMart Exchange suffered an even larger loss after two hot wallet private keys were compromised</li>
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<p>A bitcoin-focused DeFi protocol, BadgerDAO, had its web server compromised for roughly two weeks, allowing an unknown attacker to surreptitiously steal millions of dollars worth of digital assets from users of the platform, <a href="https://cms.blockworks.co/hackers-drain-115-million-from-bitcoin-defi-focused-badgerdao/" target="_blank" rel="noreferrer noopener">Blockworks reported</a>.</p>



<p>On Sunday, representatives of the DAO attempted to contact the party responsible for the theft using a message <a href="https://etherscan.io/tx/0xe0bf600d62e99f2f7b0bd6ce27a7167b8c04bd5a06727155c0334ca5c39dfd6c" target="_blank" rel="noreferrer noopener">published in a transaction on the Ethereum</a> network and on Twitter:</p>



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<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">To the Actor<br>You&#39;ve taken funds that don&#39;t belong to you but we&#39;re willing to work with &amp; compensate you for identifying this vulnerability in the systems. <br><br>We&#39;re providing you with a direct line of communication to discuss a peaceful resolution without involving outside parties</p>&mdash; ₿adgerDAO 🦡 (@BadgerDAO) <a href="https://twitter.com/BadgerDAO/status/1467333920089858048?ref_src=twsrc%5Etfw">December 5, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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<p>According to <a href="https://badger.com/exploit/updates" target="_blank" rel="noreferrer noopener">a website set up to provide updates</a> on the case, the group has enlisted blockchain forensic analysis platform <a href="https://www.chainalysis.com/" target="_blank" rel="noreferrer noopener">Chainalysis</a> and cybersecity firm <a href="https://www.mandiant.com/" target="_blank" rel="noreferrer noopener">Mandiant</a>, to help with the investigation. The latest update said that BadgerDAO&#8217;s DeFi services remain temporarily shut down:</p>



<blockquote class="wp-block-quote"><p><strong>&#8220;Smart Contracts have not yet been reactivated and therefore users remain unable to deposit, claim rewards, or withdraw from either the Badger app (app.badger.com) or at the smart contract level. Badger is working to ensure that the smart contracts can be safely reactivated without further risk to funds.&#8221;</strong></p></blockquote>



<p>The system has a &#8220;Guardian&#8221; role, that has permission to pause the DeFi strategies employed by the protocol, which is &#8220;intended to be a trusted party that can act fast in emergency situations,&#8221; according to the <a href="https://docs.badger.com/badger-finance/technical/setts/base#variables" target="_blank" rel="noreferrer noopener">Badger.com documentation</a>. The Guardian is controlled by a developer multi-signature wallet, whose five members are elected by the DAO&#8217;s BADGER token holders. Any single member of the multisig can pause the smart contracts, but it requires three out of the five signers to reactivate them.</p>



<p>Security company PeckShield <a href="https://twitter.com/peckshield/status/1466356911842856967" target="_blank" rel="noreferrer noopener">reports the total loss</a> to BadgerDAO&#8217;s users at $120.3 million, based primarily on the theft of 2,100 BTC and 151 ETH. The largest affected user of the protocol <a href="https://cms.blockworks.co/celsius-reportedly-affected-in-exploit-of-defi-protocol-badgerdao/" target="_blank" rel="noreferrer noopener">has been linked</a> to cryptocurrency lending platform Celsius.</p>



<h3 class="wp-block-heading">BitMart Exchange loses $200 million in breach</h3>



<p>Sheldon Xia, founder and CEO of the centralized exchange BitMart.com, revealed on Sunday that two of the exchange&#8217;s hot wallets were compromised in a security breach that saw upwards of $150 million in assets disappear on the Ethereum and Binance Smart Chain networks.</p>



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<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">1/3 We have identified a large-scale security breach related to one of our ETH hot wallets and one of our BSC hot wallets. At this moment we are still concluding the possible methods used. The hackers were able to withdraw assets of the value of approximately USD 150 millions.</p>&mdash; Sheldon Xia (@sheldonbitmart) <a href="https://twitter.com/sheldonbitmart/status/1467316252855226368?ref_src=twsrc%5Etfw">December 5, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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<p>Xia said that an exchange private key was used to withdraw the funds, and <a href="https://twitter.com/sheldonbitmart/status/1467722582845702149" target="_blank" rel="noreferrer noopener">pledged via Twitter</a>, to make users whole.</p>



<blockquote class="wp-block-quote"><p><strong>&#8220;BitMart will use our own funding to cover the incident and compensate affected users. We are also talking to multiple project teams to confirm the most reasonable solutions such as token swaps. No user assets will be harmed.&#8221;</strong></p></blockquote>



<p>PeckShield, which <a href="https://twitter.com/peckshield/status/1467289808045494276?s=20" target="_blank" rel="noreferrer noopener">initially pointed out</a> a pattern of suspicious transactions early Sunday morning, <a href="https://twitter.com/peckshield/status/1467310381073047552" target="_blank" rel="noreferrer noopener">has estimated the loss</a>, comprised of a variety of small cap tokens, as totaling $200 million.</p>



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