The hacker behind the recent GMX exploit has begun returning stolen crypto assets valued at $42 million in exchange for a $5 million white-hat bounty. According to Lookonchain, the individual has already sent back $10.49 million in FRAX, signaling a partial compliance with the deal offered by the GMX team.
The exploit was based on a weakness of the GMX V1 protocol, liquidity pool GLP, and a network issue on the Arbitrum network. The hack led to the loss of different assets such as FRAX, USDC, DAI, WBTC, and WETH. GMX was quick to bring the action to a halt by halting all GLP-related transactions on Arbitrum and Avalanche to curb any further damage.
In the fight against the theft of funds, the GMX team publicly offered a reward to the attacker. The idea they suggested is a 10 percent white-hat bounty, that is, $5 million, should assets be returned within 48 hours, and not to be prosecuted. This offer has been accepted partially, where the first asset return was vindicated soon after.
Converted ETH Raises Doubts Over Hacker’s Next Move
Although $10.49 million has been handed back, the rest of the stolen money, approximately $32 million, was transformed into 11,700 ETH. Ethereum has appreciated in the market, thereby increasing the converted amount to about $35 million, meaning the unrealised gain of $3 million is left in the hands of the hacker.
Observers are keen to know whether the attacker will keep all the 11,700 ETH that he stole or just the capital as it was initially stolen. This ruling can decide whether the hacker will retain any additional gain or whether he or she will respect the bounty bargain.
Blockchain security firm PeckShield and Cyvers explained the attack by a re-entrancy vulnerability in the GLP pricing code. This weakness enabled the hacker to alter transaction timing and bleed bank accounts in a queue of quick transactions.
The price of GMX’s native token dropped by almost 20 percent after the hack and was selling at around $11.20. The country was reported to be high-security, and despite the incident, the overall cryptocurrency market was stable, with both Bitcoin and Ethereum experiencing a small rise.
Conclusion
As the GMX hacker begins the process of returning the stolen funds, questions now turn to whether the remaining ETH will be surrendered. The resolution could set a precedent for how white-hat offers are handled in high-profile DeFi breaches.
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