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Prisma Finance Hacked; Hacker Demands Apology and Offers to Return $11M

TL;DR

  • Following an $11 million hack of Prisma Finance, a self-proclaimed white-hat hacker has made unusual demands, including that the team hold an online press conference to apologize and commend the hacker for identifying a security flaw.
  • The incident highlights ongoing security vulnerabilities within the DeFi sector and sparks debate over the ethics of negotiating with hackers.

Following a hack of Prisma Finance that caused an $11 million loot from this prominent liquid staking protocol, a hacker in the decentralized finance (defi) division has made some stunning proposals. This person called themselves to be white-hat hackers since they are good ethical hackers who try to find bugs and fix them. Under certain conditions, the money they stole can be returned according to this incident that took place on March 28.

Unusual demands by a hacker

Controversy among both the wider defi community and Prisma Financial’s community has been stirred up by an unconventional demand made by a hacker. The team must hold an online press conference for Prisma Finance, during which they should state their names openly, apologize to users and investors as well as commend the hacker for supporting them fix the security breach. The basis of this criticism is that Prisma did not notice the vulnerability which was used for hacking, something that perhaps if acknowledged publicly could serve as warning for others in DeFi industry at large.

The response from Prisma Finance to the hack has been that of temporary cessation of protocol operations following an analysis made after the incident. The identified vulnerability was as a result of inadequate input validation on a particular smart contract function which is what the team is going to rectify. What they are more concerned with at this moment is retrieving investors’ money and then relaunching the protocol when it will be deemed safe.

Skepticism and strategy

The cybercriminal’s behavior including the transfer of 2million plus in ether to the address of Blockchain mixing service Tornado Cash and brings speculations about the aim. The priority role of Tornado Cash, known as a difficult cash, gunning down the circulation of the cryptocurrency trasactions, has a reverse effect on the narrative, associating the supposed hacker with a black hat, a cybercriminal. The vote has mainly posed a threat for Prisma Finance users since a user commented on the platform’s Discord backing that the hacker seems to be struggling between beneficial and malicious activities.

Defi Struggles

This occurrence points out the ever present security issues in DeFi sector. Despite making deals with hackers not being completely unheard of before, this one presents unique challenges that stretch way beyond conventional mitigation strategies. What are the ethics behind publicly commending a hacker for hacking into something?

With the situation proceeding, the DeFi community is in a role of the observer, noticing that a stabilization of this situation will form a standard of behavior for the future tackling of cycles of security breaches in the future. The case of Prisma Finance and the hacker which raises ethical and strategic issues as well as the scope of ensuring security, transparency, and responsibility is a manifestation of the wider implications of the ever changing DeFi arena.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Haseeb Shaheen

As a Web Researcher and Internet Marketer, Haseeb Shaheen delivers relevant valuable content for audiences. He focuses on financial and crypto market analysis, as well as technology-related areas that help people change their lives.

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