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Crypto Market Maker Wintermute Loses $160M to Hack

| Updated
by Babafemi Adebajo · 3 min read
Crypto Market Maker Wintermute Loses $160M to Hack
Photo: Depositphotos

The CEO gave no details as to how and when the hack happened. But he stated that 90 assets had been affected.

Leading crypto market maker Wintermute has lost about $160M to a hack of its DeFi operations. Founder and CEO Evgeny Gaevoy, disclosed this in a tweet thread while stating the firm’s centralized finance and over-the-counter verticals remain unaffected.

Wintermute was recently announced as the official DeFi market maker for the TRON Network. The firm also provides liquidity across several crypto exchanges, including Binance, Coinbase, FTX, and Kraken. According to the CEO, the firm remains solvent.

While noting that the DeFi services may be affected for a few days, Gaevoy reassured its clients that their funds were safe. “We are solvent with twice over that amount in equity left,” he said. While a mass withdrawal could hurt the firm, Gaevoy assured lenders who wished to recall their loans that their requests would be honored.

Wintermute Calls Hack a White Hat Attack

Gaevoy neglected to give details as to how and when the hack happened. He, however, stated that 90 assets had been affected. Of these, only two were between $1 – $2.5 million while all the rest were under $1 million. He noted that the firm would communicate with all affected parties.

However, Gaevoy said the firm was treating the hack as a white hat hack. In such an attack, a hacker exploits a system’s flaw to expose it. Should the hacker reach out, he will be allowed to keep some of the funds as a bug bounty.

Meanwhile, Crypto sleuth ZachXBT has provided details of the hacker’s wallet address. The wallet holds Ether worth about $9 million and $38 million in different ERC20 tokens.

“We clearly understand that Wintermute’s outdated MM business model led to such a collapse. Founders in crypto should think that giving a large value of tokens to ONE Market Maker wallet under management is a road to nowhere. Moreover, management in a similar centralized way is carried out both on the CEX and on the DEX. Why won’t Social Engineering allow CEX to be hacked tomorrow and withdraw the other half of Wintermute funds? The future lies with distributed MMs that DO NOT TAKE control of their funds from their clients,” said Alex Andryunin, CEO at Gotbit.io.

Rising DeFi Hacks

According to crypto auditing platform, Certik, over $1.3 billion was lost to DeFi hacks in 2021. Earlier in the year, Axis Infinity lost over $600 million to its Ronin network hack. Also, Harmony lost about $100 million in June.

Just last month, Nomad lost over $190 million to hackers. Soon after, DeFi protocol Curve Finance lost $570,000. Wintermute is the latest crypto firm to suffer a hack recently. In response to the hack, Dragonfly Capital partner, Haseeb Qureshi, said, “If it can happen to Wintermute… Stay safe. Stay paranoid.”

Established in 2017, Wintermute facilitates billions of dollars worth of cryptocurrency trading.

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Babafemi Adebajo

An experienced writer and Fintech enthusiast, passionate about helping people take charge of, scale and secure their finances. Has ample experience creating content across a host of niche. When not writing, he spends his time reading, researching or teaching.

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