Share this article
DeFi Protocol Platypus to Repay at Least 63% of User Funds After $9M Hack
The Avalanche-based protocol worked with crypto exchange Binance to identify the exploiter responsible for last week's attack.
Updated Feb 23, 2023, 7:14 p.m. Published Feb 23, 2023, 6:04 p.m.
Make us preferred on Google
Platypus Finance, a decentralized-finance (DeFi) protocol for stablecoins, will repay a minimum of 63% of funds to users after it managed to recover a part of the $9 million drained from the protocol last week, it said in a blog post Thursday.
The protocol also worked with crypto exchange Binance to confirm the exploiter’s identity. The hacker used a Binance account that went through know-your-customer checks for a withdrawal request. Platypus said it contacted law enforcement and filed a complaint in France.
STORY CONTINUES BELOW
The Platypus hack last week exploited a bug in the platform’s solvency check mechanism to steal $9.2 million of digital assets, leading to its native stablecoin USP yo lose its dollar peg.
The exploit consisted of three consecutive attacks, the post explained. The first and most severe drained a total of $8.5 million in stablecoins, including Circle’s USDC, Tether’s USDT, Maker’s DAI and Paxos’ binance USD from the protocol’s main pool.
Read more: How Solvency Check Error Led to USP Depegging on Avalanche-Based Platypus Finance
The protocol recovered $2.4 million of stolen USDC stablecoins with the help of blockchain security firm BlockSec. Additionally, Tether froze $1.5 million of stolen USDT, according to the post.
The second attack mistakenly transferred $380,000 of stablecoins to lending protocol Aave. Platypus has submitted a proposal to Aave’s governance forum for the release of those assets.
Some $287,000 worth of assets were stolen in the third attack. The protocol considered the funds unrecoverable and lost, as the exploiter ran the stolen assets through crypto mixer Tornado Cash and encryption service Aztec Network, according to the post.
In the blog post, the protocol said it hadn't used its $1.4 million treasury to compensate victims of the hack, but might do so over the next six months if Platypus cannot recover more assets.
“This compensation plan ensures that a minimum of 63% of the funds will be distributed to users, regardless of any further update on fund recovery,” the Platypus post said.
If Tether agrees to remint the frozen USDT to Platypus and Aave approves the recovery proposal, then 78% of user funds will be recovered.
Platypus said it aims to restart the stablecoin swap protocol next week, without its depegged stablecoin, USP.
The Platypus exploit is the latest example of crypto’s rampant problem with hackers. Last year, hackers stole $3.8 billion in crypto assets, primarily from DeFi platforms such as Platypus, according to a report by blockchain security firm Chainalysis.
Read more: With Hacks at a Record High, Crypto Needs to Find Better Ways to Keep Users Safe
More For You
KuCoin captured a record share of centralised exchange volume in 2025, with more than $1.25tn traded as its volumes grew faster than the wider crypto market.
What to know:
- KuCoin recorded over $1.25 trillion in total trading volume in 2025, equivalent to an average of roughly $114 billion per month, marking its strongest year on record.
- This performance translated into an all-time high share of centralised exchange volume, as KuCoin’s activity expanded faster than aggregate CEX volumes, which slowed during periods of lower market volatility.
- Spot and derivatives volumes were evenly split, each exceeding $500 billion for the year, signalling broad-based usage rather than reliance on a single product line.
- Altcoins accounted for the majority of trading activity, reinforcing KuCoin’s role as a primary liquidity venue beyond BTC and ETH at a time when majors saw more muted turnover.
- Even as overall crypto volumes softened mid-year, KuCoin maintained elevated baseline activity, indicating structurally higher user engagement rather than short-lived volume spikes.
More For You
Solana’s new phase is ‘much more about finance,’ says Backpack CEO Armani Ferrante
The Solana ecosystem has spent the past year doubling down on a financial infrastructure, Backpack CEO Armani Ferrante told CoinDesk.
What to know:
- Solana’s latest phase looks a lot less flashy than its memecoin-fueled highs, and that may be the goal.
- Armani Ferrante, CEO of crypto exchange Backpack, told CoinDesk in an interview the Solana ecosystem has spent the past year doubling down on a more sober focus: financial infrastructure. A
- fter years of experimentation as the wider crypto industry focused on NFTs, games and social tokens, attention is now shifting back toward decentralized finance, trading and payments.
Top Stories
