Crypto

Bitcoin DeFi's ALEX Lab Hacked for $4.3M, Proposes 10% Recovery Bounty

ALEX Lab loses $4.3M in DeFi hack, offers bounty; legal and regulatory crackdowns underscore crypto vulnerabilities.

By Alex P. Chase

5/15, 04:40 EDT
Bitcoin / U.S. dollar
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Key Takeaway

  • ALEX Lab's Bitcoin DeFi tool lost $4.3M in a hack due to a private key compromise, affecting its XLink bridging service.
  • The hackers stole over $300,000 in BTC, $3.3M in stablecoins, and $75K in SKO tokens.
  • ALEX offers a 10% bounty for the return of stolen funds and has frozen hacker-associated funds on major exchanges.

ALEX Lab Bridge Compromise

In a significant security breach, ALEX Lab's DeFi application suffered a loss of over $4.3 million in various tokens due to a suspected private key compromise. The attackers targeted ALEX’s XLink bridge, a crucial service enabling token transfers across different blockchains. The stolen assets included more than $300,000 in bitcoin (BTC), $3.3 million in stablecoins, and $75,000 in Sugar Kingdom (SKO) tokens. Security firm CertiK highlighted the breach's nature, pointing to the vulnerability of private keys as a common attack vector in the crypto space.

Legal Consequences in Crypto

The crypto world saw a significant legal development as Tornado Cash developer Alexey Pertsev was sentenced to 64 months in prison by a Dutch court for money laundering charges. Pertsev's conviction stems from his involvement with Tornado Cash, a platform implicated by the U.S. Treasury for facilitating money laundering activities, notably by the North Korean hacking group Lazarus. This case not only underscores the legal risks associated with crypto development but also sets a precedent for future trials involving crypto entities and their developers.

Chinese Crackdown on Illegal Crypto Operations

Chinese authorities have arrested six individuals for operating an illegal $296 million crypto-based currency scheme. This operation, described as an "underground bank," facilitated illicit exchanges between the yuan and the South Korean won, exploiting cryptocurrency's anonymity. The crackdown by the Public Security Bureau of Panshi City, Jilin, emphasizes China's stringent regulatory stance on cryptocurrencies and their use in circumventing financial laws and regulations.

Management Quotes

  • ALEX developers:

    "ALEX Lab Foundation has identified the individual responsible for the recent security breach and is offering a resolution through a bounty arrangement... ALEX assures that upon compliance, there will be no further pursuit or law enforcement involvement. This offer stands until May 18 at 0800 UTC."