Huobi And Binance Recovers $2.5 Million Worth Of Bitcoin From Harmony One Hackers

Huobi And Binance Recovers $2.5 Million Worth Of Bitcoin From Harmony One Hackers

In a combined effort, security teams from Huobi and Binance crypto exchange were able to freeze and recover 121 BTC from a wallet linked to the hack on Harmony One blockchain. Last July, a token bridge on the network was drained of $100 million worth of crypto after hackers exploited a security vulnerability.

After noticing that Harmony One hackers were laundering stolen funds through the cryptocurrency exchange Huobi, the security team at Binance contacted the platform and was able to make a timely intervention to freeze and recover all assets deposited by the culprits. Binance CEO Changpeng “CZ” Zhao took to Twitter to announce that Huobi was able to recover 121 Bitcoins worth over $2.5 million. The hacker first tried to move the assets through Binance, which failed to materialise.

On June 24, 2022, Harmony, a Layer-1 blockchain, was drained of $100 million worth of crypto assets after the infamous North Korean hacking organisation, Lazarus Group, exploited a token bridge on the protocol. The Horizon bridge facilitated token transfers between Harmony (ONE) and Ethereum (ETH), Binance Smart Chain (BNB) and Bitcoin (BTC) networks. Hackers targeted employee login credentials to breach Harmony’s security system and get access to a multisig Ethereum wallet on Horizon, which only required two out of four signees to approve transactions.

Huobi And Binance Recovers $2.5 Million Worth Of Bitcoin From Harmony One Hackers

The vulnerability was warned of by several crypto developers before the attack took place. However, the Harmony One team did not respond to the warnings, which led to the protocol being drained of vast amounts of crypto. Hackers were able to drain $100 million worth of Frax (FRAX), Wrapped Ether (wETH), Aave (AAVE), SushiSwap (SUSHI), Frax Share (FXS), AAG, Binance USD (BUSD), DAI, Tether USD (USDT), Wrapped BTC (wBTC) and USD Coin (USDC) from the Horizon token bridge. The tokens were sent to a different wallet and then transferred to Uniswap decentralised exchange (DEX) to be swapped for ETH, before being sent back to the original wallet.

The Harmony attack is said to be one of the largest exploits faced by the industry in 2022.

Prior to Huobi and Binance freezing the assets, on-chain crypto detective ZachXBT noted that Lazarus Group was moving 41,000 ETH, worth $63 million at the time of writing, linked to the hack through coin mixer Railgun to hide transactions. The tokens were then consolidated and deposited on three different crypto exchanges; Binance, Huobi and OKX. Justin Sun, the lead advisor for Huobi and founder of Tron blockchain (TRON), thanked the Binance team after they were able to prevent the hacker from laundering funds through the platform.

Lazarus Group was identified as the main suspect behind the hack due to the attack pattern being similar to other exploits conducted by the organisation.

The hack questioned the security of token bridges on blockchain protocols. Last January, in a discussion on a Reddit forum, Ethereum co-founder Vitalik Buterin pointed out that when bridges are hacked it threatens the liquidity of each chain that was affected. He also added that with the number of token bridges increasing, the possibility of a 51% attack on one bridge could present a greater contagion risk to other connected blockchains.

As the name suggests, a bridge connects two different blockchains, allowing for the transfer of tokens or other data from one chain to the other. Token bridges improve interoperability between decentralised applications (DApps) on different blockchain protocols. However, in 2022 alone, various token bridge exploits led to combined losses of nearly $1 billion to platforms and investors.

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