BNB Chain hacker’s collateral assets near liquidation on Venus

A position of 924 830 BNB (~$215 million) on Venus Protocol, owned by the hacker who breached the BNB Chain in October 2022, is on the verge of liquidation. 

Last year, as a result of the BSC Token Hub exploit, the attacker managed to carry out a double-spend attack. He subsequently deposited the proceeds into the Venus lending protocol to open positions worth $147 million in USDT and USDC stablecoins.  

The developers had to halt the blockchain to fix the vulnerability and carry out a hard fork. As a result, the hacker managed to withdraw the digital assets worth about $100 million; the rest of the funds were locked in the contract. 

According to Venus Protocol, in November BNB Chain submitted a proposal to whitelist the hacker’s position for liquidation. The community approved the initiative by a majority. 

In November 2022, @BNBCHAIN submitted a governance proposal which was passed by the community to whitelist liquidation of the BNB Bridge exploiter’s position exclusively to @BNBChain core team for the purpose of securing the misappropriated assets and preventing any further…

— Venus Protocol (@VenusProtocol) June 12, 2023

The network leadership pledged to bear the costs if the open trade approached the forced-liquidation threshold. Initially, the BNB Chain team funded the position at $30 million.

According to DeBank, at the time of writing the hacker’s collateral health score stood at 1.06. When the metric falls to one, the position will be automatically liquidated by the protocol.

The collateral value began to fall as the price of BNB declined. Since October 2022, the asset price has fallen from a peak of $354 to $233.

In June 2023, users of the decentralized wallet Atomic Wallet lost $35 million in a hack. Later the hacker sent the assets to the cryptocurrency mixer Sinbad.io, used by North Korea’s Lazarus Group.