The crypto trading platform Cypher has outlined its strategy for recovering from a $1 million breach, announcing its intention to distribute the losses evenly across its user base during the initial recovery phase. As part of the first phase, Cypher, which operates on the Solana network, will make available a proportionate redemption package based on its current assets, accessible to users via a web portal. Given the platform’s current financial standing, it cannot compensate all depositors fully; hence, the deficit will be equally shared among all accounts initially, rather than placing the burden on a specific set of individuals or groups.
For the second part of its recovery effort, Cypher aims to source funds through an initial DEX offering (IDO), with the capital raised earmarked for audits and ongoing platform development. Concurrent with the IDO, users will receive a “debt token” symbolizing the outstanding amount the protocol owes them. This token entitles holders to a portion of Cypher’s future profits in USD Coin (USDC) – currently valued at $1.00 – facilitating a gradual reimbursement of the losses from the breach back to the platform’s users. The team emphasized, “Our primary objective is to channel resources towards the affected users, highlighting our commitment to alleviating their monetary setbacks.” Once the reimbursement process concludes, Cypher intends to commission audits by OtterSec and Mad Shield on its amended version, aiming to pinpoint and rectify any latent vulnerabilities. Operations will recommence only after a comprehensive review, ensuring all potential weak points are rectified. Until then, the platform’s smart contracts will remain inactive, as detailed in the recovery strategy.
The adverse exploit of $1 million against Cypher transpired on August 8, with its origins yet to be identified by security analysts. Approximately $600,000 of the cryptocurrency siphoned off during this breach was intercepted and frozen by multiple centralized trading platforms, thwarting the assailant’s attempts to liquidate it. Cypher conveyed its intentions to retrieve these funds for its clientele, either via collaboration with these exchanges or by leveraging seizure mandates granted by legal authorities.
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