Yearn Finance Attack: Tether freezes $1.75M USDT stolen

Yearn finance

TL; Dr Breakdown

  • Hacker attacks Yearn Finance DAI vault and makes away with $2.8 Million.
  • Tether freezes $1.7 Million in USDT to stop further loss.
  • This is the second time the company would freeze USDT funds to stop an attack.
  • Many are raising concerns that the action of Tether contradicts the true purpose of DeFi.

Tether recently froze about $1.7 Million that was stolen from Yearn Finance DAI vault, reports Paolo Ardino, Tether CTO. The attack on the vault was thought to be triggered by an Aave flash loan resulting in about a $11 Million loss.

Yearn Finance v1 DAI Vault Suffers An Attack

The company initially released the news on the 4th of February via Twitter, disclosing the details of the attack. It further revealed that it was able to stop the fraudulent act in less than 11 minutes, to prevent further loss.

The DAI vault attacked was recently updated to a new investment strategy, based on a report by Yearn. The strategy was supposed to deposit all funds into the 3pool on the AMM curve before the attack happened. The attacker manipulated the price of DAI set by the pool to make away with flash-borrowed funds.

Attack On Yearn Finance Resulted In $11million Loss

Despite the attack on Yearn Finance DAI vault, Tether’s action has raised a few eyebrows. Twitter users lashed the company. Some said the company’s action was against the principles of DeFi. Others said that the company was sabotaging its public image by calling the company “centralized.” 

However, this is the second time that Tether would be freezing USDT in times of crypto attacks. The same happened during an attack on KuCoin after hackers made away with over $280 Million. Events like this have led people to question the integrity of Tether. However, the company said it has launched an investigation but has currently disabled strategies for USDC, v1 DAI, TUSD, and USDT.

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Kamsi King

Written by Kamsi King

King Kamsi is a fintech and digital currency writer and enthusiast. He is keenly interested in blockchain and cryptocurrency and their global adoption. When not busy with writing, he can be found hobnobbing in forums with the best minds in crypto, both developers and startup founders.