Attackers who targeted PolyNetwork managed to issue approximately $4 billion worth of malicious tokens. However, their efforts are unlikely to result in significant financial gain due to the low liquidity and security measures in place.
On Sunday morning, attackers exploited a smart contract function within PolyNetwork’s bridge tool, leading to the issuance of billions of dollars’ worth of various tokens.
Bridges enable users to exchange tokens across different blockchains through smart contracts. This process involves locking the value on one network and releasing it on another, facilitating seamless token swaps.
The attackers behind the PolyNetwork hack were able to manipulate the bridge’s functionality, deceiving it into issuing tokens on a network that didn’t actually exist. This manipulation allowed them to exploit the system and carry out their fraudulent activities.
In the aftermath of the attack, the hackers managed to mint an astonishing amount of tokens across different blockchains. This included 24 billion Binance USD (BUSD) and BNB on the Metis blockchain, 999 trillion Shiba Inu (SHIB) on the Heco blockchain, and millions of other tokens on networks like Avalanche and Polygon. As a result, the attackers’ wallet appeared to hold a staggering $42 billion worth of tokens, at least on paper.
Despite accumulating a massive stash of tokens, the attackers faced a significant hurdle in monetizing their ill-gotten gains. The lack of liquidity proved to be a major obstacle, as there was no sell liquidity available for the BNB and BUSD tokens on the Metis blockchain. Additionally, the METIS tokens that were illicitly issued were locked on the PolyNetwork bridge by developers, further preventing their conversion into tangible value.
We are aware of Polybridge’s ongoing situation, and are currently in contact with the PolyNetwork team to minimize the impact of the attack and further asses the situation.
In regards to the newly minted BNB and BUSD on Metis, there is no sell liquidity available.
All funds on…
— Metis🌿 (@MetisL2) July 2, 2023
In a surprising turn of events, the attacker managed to find liquidity for some of the illicitly-minted tokens. According to analytics firm Lookonchain, they successfully exchanged 94 billion SHIB tokens for 360 ether (ETH), 495 million COOK tokens for 16 ether, and 15 million RFuel tokens for 27 ether. This allowed them to convert these tokens into a more widely recognized cryptocurrency.
Lookonchain observed that the hackers were transferring assets, including 1 ETH, to new wallets, indicating a potential intention to sell these assets in the market. This activity suggests that the attackers are looking to liquidate their acquired tokens and convert them into more tradable assets.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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