JPEG’d, a leading blockchain protocol, recovered 5,495 Ether, worth $10 million at current market prices, a major DeFi breakthrough. The infamous Curve Finance hacker, a white-hat hacker, returned the Ether.
On July 30, JPEG’d, which offers a DeFi lending protocol that lets users borrow against their collateralized NFTs (non-fungible tokens), was hacked, losing $11.6 million in cryptocurrencies.
JPEG’d confirmed the recovery on X
The JPEG’d team’s recent X (formerly Twitter) thread confirmed that the stolen funds were returned to the protocol’s decentralized autonomous organization multisig wallet address. The hacker returned the funds and received 610.6 ETH, worth $1.1 million, as a token of their goodwill.
As a “white-hat rescue,” the JPEG team thanked the hacker and promised to drop any further investigations or legal action.
The hacker targeted several Curve Finance liquidity pools late last month, causing major disruption in the DeFi ecosystem. A Vyper smart contract programming language security vulnerability allowed the hacker to steal $70 million in cryptocurrencies.
The attack affected Ellipsis, Alchemix, JPEG’d, and Metronome. These projects lost millions in liquidity pool assets. Curve Finance lost $24 million in Curve DAO (CRV) tokens.
Curve, Metronome, and Alchemix united to give the DeFi community hope after the hack. They announced a joint effort to recover the funds on August 3. The hacker was offered a unique deal: returning 90% of the funds would exempt them from legal action and bring a 10% bounty.
Amazingly, the hacker accepted the deal in less than 24 hours and started returning the stolen funds to the affected projects. The hacker returned 4,820.55 Alchemix ETH (alETH) worth $8.8 million to Alchemix Finance in addition to JPEG’d. Curve Finance received 1 ETH ($1,829) in restitution.
This unprecedented ethical hacking has sparked DeFi community discussions on security and white-hat interventions. The DeFi space is showing that strong security and community cooperation are essential to user asset protection.
JPEG’d’s fund recovery shows the DeFi industry’s resilience and determination to protect users and assets. As the ecosystem matures, industry players may use this event to strengthen their protocols against threats and vulnerabilities.