Bitcoin
continues to rest close to the important support level at $19,000. There are
still no reasons for a rebound of the coin. Downside targets are intact as the
nearest support is located at $15,000 with a possible rebound to $18,000. The
mid-term downside targets are at $12,500 per coin. Any negative downside
dynamics of Bitcoin would certainly impact altcoins that may lose more than 50%
of their current prices with this scenario.
The unknown
hacker has attacked Mango Markets DeFi protocol causing damages of $116
million. The attacker used several accounts, from one of which a collateral of
5 million USDC was funded. Straight after that, the hacker placed an order to
sell 483 billion MNGO tokens. The second account was deposited with another
collateral of 5 million USDC that was used to buy the designated number of
tokens at $0.0328 per token.
The hacker
then pumped the MNGO token prices to $0.91, making a profit of $423 million for
the second account. This allowed the schemer to borrow $116 million from the
protocol which became the bad debt of the latter account. MNGO prices dropped
to $0.02 per token. The vulnerability stemmed from the thin liquidity on the
exchange market between MNGO and the USDC stablecoin, which was used as the
price reference for a MNGO perpetual swap.
What is
more unusual is that the hacker voiced an offer to return a part of the funds
while keeping $70 million as bounty to not be prosecuted with a criminal act.
He initiated voting on the Mango Markets decentralised governance platform to support
his proposition. He pointed out that the Mango Markets have the treasury
designated in such a way that bad debts can be wiped out and all users can be
paid back .
The Mango
DAO that governs Mango Markets has agreed to pay the hacker $47 million without
any further criminal prosecution of the schemer. Stolen funds are now being returned
to the project. But the crypto public was pretty much confused with the
decision of the governors not to continue with a criminal prosecution, although
an internal investigation is already running. In fact, the confusion could be
well understood as the schemer did not violate any laws by making collateral
manipulations. Even the price manipulations he performed with the Mango
Markets’ digital assets will not be legally prosecuted. After all, that was not
a real hack as the schemer used protocol vulnerability without stealing any
private information or getting illegal access to user accounts. Moreover, this
is not the first an attempt to exploit collateral access and crate a bad debt
on protocol’s heavily inflated trade balance has been carried out. A similar
attack was made on Drift Trade project in May.
This story
is another warning to crypto enthusiasts that are ready to explore deep crypto
market waters dealing with dubious DeFi protocols. It is worthy to remember
that the entire industry is very young and is still seeking further
construction. So, hacks, even without violating the laws are a part of the
crypto world. So, dealing with top digital assets might be a better idea to
survive the current bearish crypto winter.