The Nomad cross-chain bridge was hacked on Monday, August 1, but some hackers have returned almost $16.6 million of the stolen assets at the time of writing.
During the two-hour attack, Nomad’s holdings fell by 99%, from $190.7 million to $651.54. In a tweet early Tuesday morning, Nomad stated it had alerted law enforcement and recruited blockchain intelligence and forensics firms in its efforts to trace and recover the funds.
The protocol, which allows users to transfer tokens from Ethereum to other chains such as Evmos and Moonbeam, requested “white hat hackers” and “ethical researchers” to return funds in a tweet at 04:05 UTC.
According to reports, the hack was caused by a flaw in the protocol’s smart contract. This prompted hundreds of users with little or no technical knowledge to find a transaction that worked, replace the target address with their own, and rebroadcast it. Basically, copy-pasting the steps taken by the original hacker. Because of the nature of the attack, FatMan, an anonymous Terra researcher, dubbed it “the first decentralized robbery.”
The team later confirmed that some users who siphoned the protocol’s funds were, in fact, trying to help the project by preventing the assets from falling into the wrong hands. Nomad then urged white hat hackers and ethical researchers to return the tokens.
The statement reads: “We are actively working with a leading chain analysis firm and law enforcement to trace funds. All involved are prepared to take necessary action in the coming days. If you took ETH/ERC-20 tokens with the intention of returning them, we now have a process for you to do so. ”
Blockchain security company PeckShield tweeted that while most of the returned funds have been stablecoins like USDC ($3.78 million) and USDT ($2 million), other types, including 15.8 million CQT (approximately $1.38 million), $1.28 million FRAX (approx. $1.2 million), 100 ETH (approx. $164k), 200 wETH (approx. $328k), 150k DAI, and a few others were also returned by multiple addresses.
More than 50% of the stolen funds are still in three main addresses. Nomad has hired crypto custodian Anchorage Digital to oversee the return process and safeguard the returned assets.
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