Platypus Finance Recovers 90% of Stolen Assets After Security Breach

Decentralized finance (DeFi) protocol Platypus Finance has announced that it has successfully recovered 90% of the assets that were stolen in a recent security breach.

In an announcement made on October 17, developers revealed that the net loss from the breach was limited to "18,000 Avalanche," which was valued at $167,400 at the time of the publication. The hacker responsible for the breach voluntarily returned the funds, and as a result, Platypus Finance has stated that no legal action will be pursued. Additionally, the developers hinted that withdrawal information for users' assets will be posted soon.

The security breach occurred on October 12, when the automated market maker running on the Avalanche blockchain suffered three separate flash loan attacks, resulting in a loss of $2.23 million. Earlier this year, Platypus Finance raised $3.3 million in funding, led by the now-defunct crypto hedge fund Three Arrows Capital.

Following the recent attack, Platypus developers have temporarily halted all liquidity pools and are conducting a thorough security audit. Flash loan attacks involve hackers exploiting vulnerabilities in the system, allowing them to borrow cryptocurrency without providing the necessary collateral. The hacker then withdraws the borrowed assets, leaving the users or protocol treasury to bear the losses.

This is the third attack that Platypus Finance has experienced this year. In July, a flash loan attack drained $157,000 from the protocol, and a previous attack in February resulted in a loss of $8.5 million. After the February incident, Platypus Finance pledged to return at least 63% of the users' assets lost in the attack through its recovery plan.