Hacker Wintermute Controls Over 51% Liquidity in Curve’s 3pool

The DeFi community has been rocked by the news that the enigmatic hacker known as Wintermute has seized control of more than 51% of the liquidity in Curve’s 3pool. This development has sent shockwaves throughout the decentralized finance space, raising concerns about the security and stability of the decentralized protocol.

The Wintermute hacking saga first gained notoriety in September 2022 when the market maker lost a staggering $160 million to a malicious breach. The hacker swiftly executed a cunning maneuver, channeling the stolen funds into the liquidity pool of Curve’s 3pool, which comprises the stablecoins USDT, USDC, and DAI. This strategic move was aimed at evading potential freezes of accounts by the issuing organizations behind these stablecoins.

As of April 2023, the DeFi community began to grow increasingly uneasy as Wintermute’s share in the pool approached 30%. Initially, this figure might have been dismissed as a minor concern given the overall liquidity in the market at the time. However, a series of exploitative incidents combined with Fear, Uncertainty, and Doubt (FUD) surrounding stablecoins in recent times caused the value of the assets within the 3pool to steadily decline. This decline ultimately propelled the hacker’s share past the alarming threshold of 50%.

Remarkably, the identity of the Wintermute attacker remains shrouded in mystery, despite the announcement of a 50,000 ARKM reward by Arkham for any information leading to their identification. This intriguing lack of clarity has only added to the air of intrigue surrounding the ongoing situation.

Other Updates Regarding Curve Finance

Amid the Wintermute hacking fiasco, additional developments have unfolded within Curve Finance, centered around the borrowing activities of founder Michael Egorov. In a recent revelation, the DeFi community unearthed another substantial loan secured by Egorov, this time on Cream Finance. The loan, collateralized with CRV tokens, stands at an approximate value of $2.5 million, boasting a health factor of 2.23.

In a bid to address the situation and raise necessary funds, Egorov initiated the sale of CRV tokens through an Over-the-Counter (OTC) mechanism to interested individuals and organizations within the crypto industry. By August 10th, this initiative had successfully accumulated a substantial amount of CRV, totaling 143.65 million, resulting in a commendable $57.46 million USD that Egorov intended to employ for safeguarding DeFi borrowing positions from the looming threat of liquidation.

As of the time of writing, the hacker-controlled CRV-ETH pool has yet to demonstrate any intention of returning the funds, prompting Curve Finance to announce a generous bounty of $1.85 million USD for anyone who successfully identifies the perpetrator.

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