They hack this cryptomony and issue $ quintillion – it collapses (-94%) in the process!

Who will insure the insurer? – On December 28, the DeFi Cover protocol was the target of several attackers. A total of 40 trillion COVER tokens were fraudulently issued.

The attacked insurer

Yesterday, around 11:00 am (French time), the decentralized insurance protocol on Ethereum Cover was hacked.

As a reminder, Cover is a protocol that proposes to its users to insure their assets in a decentralized way.

In fact, the protocol has been the target of several attacks. The attackers took advantage of a bug in the smart contract to fraudulently issue 40 trillion COVER tokens.

Once the tokens were in their possession, the thugs deposited the cash on the Balancer protocol, then recovered the assets that were collateralized by the COVER tokens, which they later resold.

Unfortunately for the project, COVER’s price collapsed from $724 to $48 in a matter of hours.

Grap, the savior of Cover

Luckily for Cover, the DeFi Grap protocol was there to back him up. The company managed to recover 4,351 ETH, or about $9.4 million. This represents 34% of the stolen funds.

To do this, it seems that Grap used exactly the same method as the attacker. In its restitution transaction, however, Grap did not prevent itself from tackling Cover on its handling of the incident :

«Next time, take care of your own shit! »

Be that as it may, this case calls into question Cover’s legitimacy in the field of decentralized insurance. For their part, many holders suffered heavy losses following the demented fall in the price of its token.

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Jack Dorsey er ikke en fan av nye Crypto Regulations