zkLend Hacked: Protocol Demands Return of $8.6 Million in Stolen Ethereum

zkLend, a Starknet-based layer2 money-market protocol, has suffered a significant loss due to a recent hack. The protocol confirmed the incident on February 12, stating that its internal team is investigating the root cause of the exploit. As a precautionary measure, all withdrawals on the protocol have been paused until further notice.

The Extent of the Loss

The hack resulted in a loss of over $9 million worth of Ethereum (ETH). In a post addressed to the unknown hacker, zkLend offered a “whitehat bounty” of 10% of the stolen funds, amounting to $900,000. However, the protocol demanded the return of 90% of the stolen funds, equivalent to 3,300 ETH or $8.6 million at current market prices.

We are working with security firms and law enforcement at this stage. If we do not hear from you by 00:00 UTC, 14th Feb 2025, we will proceed with the next steps to track and prosecute you.

zkLend’s Ultimatum to the Hacker

zkLend provided a specific Ethereum address (0xCf31e1b97790afD681723fA1398c5eAd9f69B98C) for the hacker to return the stolen funds. If 90% of the funds are returned, the protocol agreed to release the hacker from all charges related to the attack. Failure to respond by the deadline will result in legal action to “track and prosecute” the perpetrator.

Collaboration and Investigation

zkLend is actively tracking the funds and working to identify the hacker by collaborating with various entities, including the Starknet Foundation, StarkWare, Zero Shadow, Binance Security Team, and Hypernative Labs. CertiK Alert detected multiple attack transactions on the zkLend market, estimating the stolen amount to be at least $5 million, which was bridged to Ethereum through a specified address.

Current Status of zkLend

According to data from DeFi Llama, zkLend has a total value locked amounting to $1.19 million, with around $14.6 million in borrowed funds on Starknet Layer2.

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