Loopscale announced that all stolen funds, worth 5,726,725 USDC and 1,211 SOL, from a major exploit on April 26 have now been fully returned. This breach affected only vault depositors, sparing borrowers and other users.
This move follows a sophisticated attack that exploited vulnerabilities in its RateX PT token pricing mechanism on April 26. The attackers manipulated this pricing to drain approximately 5.7 million USD from the protocol’s USDC and SOL vaults, representing about 12% of the platform’s total value locked (TVL).
Once the attack occurred, the company swiftly paused lending markets and restricted withdrawals to prevent further damage while launching an investigation and mitigation efforts.
Loopscale Attempts White Hat Bounty Program
Loopscale publicly proposed a white hat bounty program on April 27, offering the hacker a 10% reward on the returned funds in exchange for the safe return of 90% of the stolen assets. It also warned that failure to reach an agreement within 24 hours would prompt law enforcement involvement.
By the afternoon of April 28, the hacker responded with an on-chain message, expressing a willingness to cooperate and return the stolen funds in exchange for the bounty. Initially, the hacker’s gesture of goodwill included the immediate return of 5,000 WSOL (Wrapped Solana), valued at around $740,000.
The company has announced successful recoveries over the following days:
- On April 28, an additional 10,000 WSOL (about $1.48 million) was returned.
- Later that same day, a further 4,463 WSOL (approximately $660,000) was returned.
- These returns, along with the earlier 5,000 WSOL, brought the total recovered WSOL tokens to nearly 19,463, valued at roughly $2.88 million.
- Alongside these Solana tokens, it also reclaimed the full amount of 5,726,725 USDC.
Instead of opting for a rushed or partial refund, the company implemented a phased return strategy, advocating for a deliberate and negotiated process.
Lessons for DeFi Security
While such negotiations remain controversial, they offer a pragmatic path to recoup losses that might otherwise be permanently lost in the pseudonymous and irreversible blockchain environment. Loopscale’s success story thus stands out as a beacon of hope and a potential model for other protocols facing similar crises.
Through swift action, transparent communication, and a willingness to negotiate, Loopscale mitigated what could have been a devastating financial setback for its users and ecosystem.
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