- Shezmu recovered nearly $5M in stolen crypto after negotiating a higher bounty with the hacker.
- The hacker returned 419.18 ETH and WETH to Shezmu following the agreement.
- WazirX remains unable to recover $230M in stolen funds, facing legal pressure.
Shezmu, a decentralized finance protocol, was able to retrieve nearly $5 million in cryptocurrency that had been stolen after speaking with the hacker directly. The ShezmuUSD (ShezUSD) stablecoin vault was breached on September 21st, and as a result, about $4.9 million was stolen.
Notably, Shezmu moved quickly to minimize the damage and recover the funds that had been stolen, even though there was first confusion about whether the incident was a rug pull or a real hack.
Onchain Negotiations Yield Results
Consequently, Shezmu contacted the hacker with a proposal after verifying the breach. To fix the problem, the protocol proposed a bounty in exchange for 90% of the stolen money being returned. Shezmu noted that if the hacker cooperated within a day, there would be no legal action.
In response, the hacker requested a 20% bounty as opposed to the 10% that was initially suggested. Shezmu accepted the hacker’s demands in order to swiftly retrieve the pilfered assets.
Notably, the choice turned out to be wise. Shezmu started getting refunded for the pilfered tokens in a matter of hours. These included 282.18 Ether and an additional 137 Wrapped Ether (WETH). The protocol was successful in recovering a sizable portion of the stolen funds, even though not all of them were returned right away.
Shezmu’s Strategy and Wider Industry Reactions
Furthermore, the way Shezmu handled the hack is very different from other recent crypto-related incidents. For instance, two months after being hacked, the Indian cryptocurrency exchange WazirX has been unable to retrieve the $230 million in funds that were stolen. WazirX, in contrast to Shezmu, has blamed its custodian, Liminal, for the loss rather than acknowledging the breach.
Nevertheless, an impartial assessment carried out by Grant Thornton failed to uncover any proof linking Liminal’s systems to the security breach. As a result, WazirX has been under increasing legal pressure from users and competing exchanges, including CoinSwitch’s lawsuit seeking $6.2 million in damages.
Shezmu’s attempt to recover serves as a reminder of the possible advantages of having direct negotiations with hackers. Shezmu was able to lessen the impact of the breach due to its proactive approach, while other companies are still mired in legal disputes and blame games.
Shezmu Advises Caution for Users
Notably, Shezmu has advised its users to use caution when interacting with the Oasis vault of the protocol until more information is available, even with the recovery. The company keeps a watchful eye on things as it works to get the money back and takes care of any unresolved security issues.
Therefore, this circumspect approach is indicative of the larger necessity for more stringent security measures in the DeFi domain, particularly as additional protocols come under attack.
