On 30 July, Curve Finance experienced a hack that could lead to a chain reaction in DeFi. In a week, the outflow of funds from various lending programmes has reached $2.7 billion.

Because CRV/ETH, alETH/ETH, msETH/ETH and pETH/ET used the earlier versions of the Vyper programming language, the hacker managed to steal around $70 million. It wouldn't be that big of an amount compared to the annual hacking losses of various projects if it weren't for the drop in CRV's value and its use by Curve Finance CEO Michael Egorov as collateral on Aave for a loan.

CRV's drop to $0.37 will cause forced closure of the position. This will be a headache for Aave, as the 168 million CRV coins represent a third of its circulating supply. It's impossible to sell such volume without significant slippage, which brings systemic risks for Aave and other related platforms. This caused the AAVE token to lose 14% of its value.

To avoid the worst-case scenario, Egorov held a private sale that raised $16 million for 39 million CRV. The premium for buyers amounted to 25% of the market rate. Curve has also addressed the hacker, offering a 10% reward for returning the stolen coins.

The company is offering the hacker to return 90% of the stolen coins by 6 August with a promise not to take any legal actions against them in return. If no funds are returned by the set date, Curve will provide a 10% reward of the stolen amount to those who help identify the thief. As of now, it's around $7 million.

ZachXBT, among other crypto detectives, claim they have contacted a potential suspect. The latter, however, countered that they themselves were victims of the hack and asked ZachXBT to edit the post.

Returning some of the stolen goods in exchange for non-prosecution is a fairly common practice for the cryptocurrency market. Hackers happen to return the full amount, as some of them prefer the process itself, and there's a non-zero chance of identification, even with the most sophisticated theft methods.

Yesterday, Ilya Lichtenstein, who was charged with laundering funds stolen from Bitfinex in 2016, pleaded guilty to hacking. After infiltrating the cryptocurrency exchange's network, Liechtenstein conducted over 2,000 transactions and embezzled 119,754 BTC. Currently, that's worth $3.5 billion.

StormGain Analytical Group 
(platform for trading, exchanging and storing cryptocurrency)