When I say "Hacked" I mean "Exploited" due to compromised keys allowing the attacker to fake their identity and issue themselves tokens from the Poly Network Ethereum pool. The total damaged done is estimated at $10 million but at one point the attackers wallet held $42 billion. Thankfully, a lack of liquidity allowed Poly Network officials to respond before they got away with any more.
The attacker used a simple script to insert their keys and get past verification. They didn't exploit any logic bugs but it is worrying how they got their hands on these keys in the first place. Poly Network uses a "3 of 4 multisig" system to verify each transaction. This means that it need at least 3 out of 4 correct signatures to send tokens.
The incident happened on Poly Networks bridge which was taken down by Poly Network until further notice. The effects of this were felt across 57 tokens and 10 blockchains including Ethereum, Polygon, Avalanche and more.
Poly Network was later criticised for taking several hours to respond to the first reports which cost them another estimated $5.5 million.
Until next time Happy Cryptoing!
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