Mixin Network, a decentralized cross-chain transfer protocol based in Hong Kong, is in turmoil following the revelation of a $200 million hack.
On September 23, hackers successfully breached the database of Mixin’s cloud service provider, leading to a $200 million loss in assets on its mainnet. In response to this, the protocol immediately halted deposit and withdrawal services. Nevertheless, the developers assured that transfers would proceed unaffected while the investigation is underway.
Two days later, on September 25, Zhuoer Jiang, CEO of the Bitcoin mining pool BTC.TOP, asserted in a post that the Bitcoin stored in the Mixin protocol should not have been vulnerable to theft. According to Jiang, Mixin’s Bitcoin is generally held in cold storage, safeguarding it from hacks like the one impacting Mixin’s hot wallets. In July, Mixin reported holding a total of 9,544 BTC, valued around $253 million within its protocol.
In a live briefing on the same day, Mixin founder Xiaodong Feng acknowledged that Bitcoin was the principal asset stolen. He stated that developers would reimburse users for the lost assets, covering up to 50% of the losses. The rest would be issued to users as “tokenized liability claims.” Mixin plans to repurchase these with its future earnings.
Established in 2017, before the incident, Mixin had nearly $400 million locked across 48 chains in its protocol, as reported by DefiLlama. The protocol permits users to transmit digital assets to others using phone numbers. Xiaolai Li, a notable Chinese billionaire and an early Bitcoin enthusiast, is among the initial angel investors in the company.
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