Key Takeaways
Sonne Finance was forced to halt operations after a hacker stole $20 million in crypto from its contracts on May 14;
The hacker was offered a bug bounty yet has shown no interest in negotiating;
Investigations revealed a known vulnerability in Sonne’s system; a community member criticized the protocol for failing to address it.
Sonne Finance, a decentralized lending protocol, had to halt operations after a hacker swiped $20 million in crypto from the market.
The breach, affecting Sonne’s USD Coin (USDC) and Wrapped Ether (WETH) contracts, was disclosed by Web3 security firm Cyvers at 10:28 PM UTC on May 14.
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Sonne Finance detected the breach 25 minutes after it happened and couldn’t prevent the theft of multiple cryptocurrencies, including USDC, WETH, VELO, and soVELO.
The platform announced a pause on all activities on the Optimism network at 12:11 AM UTC on May 15 and collaborated with Cyvers to investigate the breach.
The protocol offered a bug bounty to the hacker, a practice in which the hacker would return most of the stolen funds in exchange for a reward, typically about 10% of the total value. However, the hacker has shown no interest in negotiating.
PeckShield, a blockchain analysis firm, reported that the hacker had transferred $7.8 million to a new wallet and converted assets, suggesting a possible preparation to launder the money through privacy-focused services like Tornado Cash.
Further investigations revealed that the vulnerability exploited was a known bug in Sonne’s Compound V2 forks. Developer @GiantBabyCorn explained how the breach happened and criticized the protocol on X.
As of now, the funds from Sonne Finance have not been recovered, and the hacker remains at large.
The incident highlights the possible security challenges within crypto and raises questions about the adequacy of current protective measures against such attacks.
Recently, on-chain investigator ZachXBT reported another major exploit involving $14.8 million in crypto, which affected the Rain crypto exchange.
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.
