Decentralized finance (DeFi) protocol Unizen swiftly reacted to a compromise on its platform, committing to reimburse users who lost up to 750,000 units, striving to restore confidence and mitigate losses after approximately $2.1 million in user funds were compromised.
Blockchain analytics firm PeckShield identified an “approve issue” on March 9, signaling a potential security breach, with over $2 million already siphoned from the platform. Users were promptly advised by PeckShield to revoke approvals from the trade aggregator to prevent further loss. Security firm SlowMist estimated the exploit’s losses at $2.1 million, highlighting a swap of Tether (USDT) for Dai (DAI) by the attacker.
In a bid to recover remaining stolen funds, Unizen initiated bounty negotiations with the hacker, offering a 20% reward. Simultaneously, the protocol engaged law enforcement and forensic experts to identify the attacker.
Unizen swiftly prioritized refunding victims, committing to making 99% of affected users whole “as soon as possible,” starting on March 11. CEO Sean Noga personally loaned funds to facilitate refunds for users who lost below $750,000, with reimbursements processed in USDT or USD Coin (USDC). For those who incurred losses exceeding $750,000, the protocol pledged to handle cases individually.
The company took proactive steps to educate users on safeguarding their assets, sharing a video guide on reviewing and revoking approvals within the platform. Chief Technology Officer Martin Granström affirmed their readiness to conduct a comprehensive post-mortem report and collaborate with third-party firms to enhance security measures.
Granström assured users of an impending incident report and reiterated Unizen’s commitment to bolstering security measures in the future. The company vowed to prioritize user protection and transparency in its operations.
Unizen’s swift response to the security breach demonstrates its dedication to safeguarding user funds and restoring trust in its platform. By prioritizing user reimbursement, collaborating with law enforcement, and enhancing security measures, Unizen seeks to mitigate the impact of the exploit and prevent future incidents.
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