KyberSwap’s negotiations with the hacker are on the brink of collapse due to escalating hostility and threats from both sides.
A week after $47 million was drained from KyberSwap’s Elastic Pools liquidity solution, the anonymous exploiter responsible for the breach has called for a more amicable negotiation approach.
The demand conveyed through an on-chain message on Nov. 28, warned KyberSwap executives, token-holders, and liquidity providers to ease hostilities, threatening to postpone discussions until a more civil atmosphere prevails.
Negotiation Standoff
The attacker said they intend to present a treaty for the potential reimbursement of funds on November 30 only if the executives refrain from issuing threats and maintaining a hostile stance.
Expressing dissatisfaction with the initial responses from KyberSwap, the exploiter claimed to have faced threats, deadlines, and general unfriendliness from the executive team despite their willingness to engage in talks.
“I said I was willing to negotiate. In return, I have received (mostly) threats, deadlines, and general unfriendliness from the executive team. Under the assumption that I am treated with further hostility, we can reschedule for a later date, when we all feel more civil. You need only say the word. If not, we proceed as planned on Nov. 30.”
While KyberSwap initially proposed a bounty deal, suggesting a return of 90% of the funds in exchange for allowing the hacker to retain 10%, the situation escalated when the hacker did not comply promptly. KyberSwap gave the hacker a deadline of November 25 to return the funds and later escalated the matter by involving law enforcement and cybersecurity experts, vowing to track them down.
The DAO running the KyberSwap decentralized exchange also warned that the team has the footprints of the attacker.
KyberSwap is yet to respond to the hacker’s demand for civility but the threat of legal action and the initiation of a public bounty program to gather information for law enforcement further complicate the situation.
Fund Recovery
KyberSwap was hacked for $47 million on November 23rd. A few days later, the decentralized exchange protocol announced that it had recovered $4.67 million in stolen funds.
In a statement, the team said that a portion of the funds’ recovery was completed yesterday following negotiations with the operators of front-running bots, which extracted about $5.7 million in crypto from KyberSwap pools on the Polygon and Avalanche networks during the hack.