$200M Mixin Network hack draws controversy

Hong Kong-based decentralized cross-chain transfer protocol Mixin Network is drawing controversy over the disclosure of a $200 million hack on Sept. 25.

In a post on Sept. 25, Zhuoer Jiang, CEO of Bitcoin mining pool BTC.TOP, claimed that BTC stored in the Mixin protocol “should have never been stolen in the first place.” Jiang claims that, normally, Mixin’s Bitcoin (BTC) would have been “kept in cold storage” and remained unaffected by the cloud server hack compromising Mixin’s hot wallets. During its last monthly report in July, Mixin disclosed a total of 9,544 BTC, worth roughly $253 million, stored in its protocol. 

On Sept. 23, Mixin’s cloud service provider’s database was breached by hackers, resulting in the loss of $200 million in assets on its mainnet. Deposits and withdrawal services were immediately suspended on the protocol. However, developers said transfers would not be affected as the investigation continues.

During a live briefing on Sept. 25, Xiaodong Feng, Mixin’s founder, said that Bitcoin was “the core asset” stolen during the $200 million security incident and that developers would compensate users “up to a maximum of 50%” on the stolen assets. According to Feng, the remainder would be distributed to users in the form of “tokenized liability claims” that Mixin would eventually repurchase “with its future profits.”

Founded in 2017, Mixin had nearly $400 million across 48 chains locked in its protocol before the incident, as per data provided by DeFiLlama. The protocol allows users to send digital assets to other individuals via phone numbers. Xiaolai Li, a Chinese billionaire and early Bitcoin enthusiast, is one of the earliest angel investors in the firm. 

Magazine: Are DAOs overhyped and unworkable? Lessons from the front lines

Source: Read Full Article