- Hacker returns $10M, but $3M ETH profit still untouched.
- GMX exploit traced to re-entrancy flaw in pricing logic.
- White-hat bounty offer helps limit wider market fallout quickly.
The hacker behind the GMX protocol exploit has returned a portion of the stolen funds after agreeing to a $5 million white-hat bounty. According to Lookonchain, the attacker has already sent back approximately $10.49 million in FRAX, with a promise to return more assets.
Occurring on July 9, the exploit targeted GMX’s V1 protocol on the Arbitrum network. The hacker looted several assets of the GLP liquidity pool, including stablecoins, such as FRAX, USDC, and DAI, as well as wrapped tokens, such as WBTC and WETH. To stop the situation, GMX instantly suspended GLP trading, minting, and redemptions on Arbitrum and Avalanche.
Initially, approximately $42 million was taken, out of which $32 million was later exchanged for 11,700 ETH. The current value of ETH is almost $35 million, leaving the culprit with a profit of $3 million.
Also Read: SharpLink Gaming Buys $25.7M in ETH Directly From Ethereum Foundation
White-Hat Bounty Offer Limits Damage, But ETH Profit Raises Concerns
To recover the stolen funds, GMX offered a 10% bounty with no legal consequences if the hacker complied within 48 hours. The hacker retaliated by triggering partial returns, but the $3 million ETH profit remains untouched, raising alarm in the crypto community.
Popular blockchain security companies such as PeckShield and Cyvers also confirmed that the hack was caused by a re-entrancy vulnerability in the GLP pricing logic. This vulnerability enabled the hacker to reuse the system several times and drain the assets using several transactions.
After the hack, the native token of GMX decreased in price by about 20 percent to approximately $11.20. Notwithstanding the break, the wider crypto market was stable. Bitcoin rose by almost 2%, Ethereum increased by approximately 6%, and a considerable number of altcoin tokens also increased.
Although some of the stolen assets have been recovered, the $3 million ETH profit remains a key issue. The incident highlights the critical need for robust DeFi security and shows how white-hat deals are being used to reduce fallout after breaches.
Also Read: Ripple’s Stablecoin Move Sparks Global Shift in $685B Money Transfers
