Cryptocurrency News

Optimism Sent 20M OP Tokens to Unsynced Address, Resulting in $35M Loss

By June 9, 2022 No Comments
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Key takeaways:

  • A hacker stole 20 million OP tokens prior to the token launch on June 1
  • The Optimism team sent the tokens to Wintermute’s address that was not yet synced to the Layer 2 Optimism network
  • A hacker was able to gain access to the blockchain address and sold 1 million OP via Tornado Cash

A hacker stole 20 million OP tokens sent to the unsynced Wintermute address

Ahead of the OP token launch, Ethereum Layer 2 scaling solution tried sending 20 million OP tokens to a leading crypto market maker Wintermute as a loan. Unfortunately, there was a problem with the transactions as the funds were sent to an unsynced Ethereum address, which means that the wallet’s balance couldn’t be confirmed by network validators.

The issue occurred due to Wintermute providing a Layer 1 Ethereum address that has not yet been deployed to the Layer 2 network Optimism. Wintermute began the recovery process upon realizing their mistake.

In the meantime, while the sent OP tokens were waiting to be recovered, a hacker gained access to the blockchain address and the full 20 million OP token stash and immediately after sold 1 million tokens using an anonymizing service Tornado Cash. 

On the day of the hack on June 1st,  the 20 million OP tokens were worth roughly $35 million.

Wintermute has accepted full responsibility for the lost tokens and is committed to buying them back. In addition, the Wintermute team has called on the hacker to come forward and return the stolen funds:

“You have one week to consider being a whitehat. In case the above doesn’t happen, we are 100% committed to returning all the funds, tracking the person(s) responsible for the exploit, fully doxxing them and delivering them to the corresponding juridical system. Remember that robbers need to get lucky every time.”

The Optimism Foundation has attributed the unfortunate set of events to the “growing pains of an evolving industry” in a message to the community. It added that the Wintermute team is “word class” and commended how it is handling the whole situation. 

The price of the OP token has dipped nearly 20% on the news of a hack. OP, which launched earlier this month, is changing hands at $0.83, down more than 60% from its ATH price reached on the first trading day.