Wintermute Loses $160 Million in DeFi Hack, Remains Solvent

The Hack

Wintermute, a prominent cryptocurrency liquidity provider, recently suffered a $160 million loss in a hack targeting its decentralized finance (DeFi) operations. CEO Evgeny Gaevoy confirmed the incident on Twitter, stating that the company’s CeFi (centralized finance) and OTC (over-the-counter) operations were unaffected. Despite the breach, Wintermute remains solvent, with equity exceeding the lost amount by over two times.

A "White Hat" Incident

Gaevoy described the hack as a "white hat" event, suggesting the hacker’s intentions may not be entirely malicious. Wintermute has reached out to the hacker for further information. On-chain investigator ZachXBT identified the hacker’s wallet, which holds approximately $9 million in ether (ETH) and $38 million in other ERC-20 tokens.

Previous Security Issues

This is not Wintermute’s first security-related incident in 2022. Earlier in June, the firm misplaced $15 million worth of funds intended for the Ethereum scaling tool Optimism. The funds were mistakenly sent to an incorrect blockchain address, resulting in a loss to an attacker.

Rising DeFi Security Concerns

The cryptocurrency industry has seen a surge in hacks this year. In August, the Nomad crypto bridge lost nearly $200 million, while Curve Finance was targeted for $570,000 using a DeFi protocol. According to blockchain security firm Certik, over $1.3 billion was lost to DeFi breaches in 2021 alone, highlighting the growing need for enhanced security measures in the space.

Wintermute, founded in 2017, is a major player in global cryptocurrency markets, handling billions of dollars in daily trading volume. Despite this recent setback, the company remains operational and focused on maintaining its position as a key liquidity provider.