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Both BlockTower Capital, a major crypto hedge fund, and DeFi platform Sonne Finance have been exploited, resulting in the loss of a substantial amount of funds. 

BlockTower Loses AUM

Another day, another crypto exploit. This time, the victim is the major crypto hedge fund, BlockTower Capital. Hackers have managed to break through the hedge fund’s defenses and siphon away a significant percentage of its total assets under management (AUM), which is estimated to be at least $1.7 billion. 

Sources close to the matter have confirmed the breach, although specific details remain undisclosed. While the firm has refrained from issuing an official statement, key partners have been notified of the situation. The firm has brought in leading blockchain forensics analysts to trace the hacker and recover the stolen assets, demonstrating confidence in its recovery capabilities.

Previous Troubles For BlockTower

BlockTower Capital has faced previous setbacks, including a $1.5 million hack of decentralized exchange aggregator Dexible in February 2023, as well as challenges due to the collapse of Silvergate Bank and Signature Bank, both of which had significant crypto exposure.

Furthermore, the closure of its “market-neutral” crypto fund, managing over $100 million, compounded the firm’s challenges, reflecting a history of vulnerability to security threats.

Sonne Finance Under Attack Too

In a separate incident, Sonne Finance, a decentralized liquidity market protocol operating on Optimism and Base, experienced a cyber attack on May 15, resulting in a significant loss of funds.

Initially reported by blockchain security firm Cyvers as a $3 million theft from Sonne’s USD Coin (USDC) and Wrapped Ethereum (WETH) contracts on the Optimism chain, the situation quickly escalated. Within 30 minutes, Cyvers updated the estimate to $20 million.

Sonne Finance promptly addressed the incident on Twitter, announcing the pause of all markets on Optimism while assuring the safety of markets on Base.

Shortly after, it was revealed that scammers attempted to further capitalize on the situation. A fraudulent Twitter account impersonating Sonne Finance urged users to revoke approvals to prevent further losses, accompanied by a suspicious link. However, the tweet was swiftly deleted.

Security Exploits Plague Crypto Industry

Cryptocurrency hacks continue to plague the industry, with significant losses reported over the years. In 2022, hackers stole $4 billion, followed by $2 billion in 2023. Despite a 65% reduction in hacking incidents as of April 2024, the monetary losses remain substantial. According to the SlowMist Weekly Security Report from April 28 to May 4, 2024, total losses from crypto-related security incidents amounted to $71.39 million.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.