Gamma attempts to negotiate with hacker after $3.4M exploit

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Gamma Strategies, an Ethereum-based liquidity management protocol, has sent a message asking to negotiate a bounty with the attacker who stole $3.4 million in digital assets in an attempt to recover the funds lost in the exploit. 

On Jan. 4, blockchain security firm PeckShield detected an exploit within Gamma’s vaults. Initial estimates showed that the losses drained around 211.9 Ether (ETH), worth approximately $469,000. However, PeckShield later confirmed that the losses reached $3.4 million and that the exploiter had already transferred $2.2 million to the crypto mixer Tornado Cash. 

In response to the attack, Gamma shut down its vault deposits, allowing only withdrawals. The protocol has also sent a message to the exploiter’s wallet address, hoping to start negotiations for a bounty for returning the crypto assets. 

Gamma attempts to negotiate a bounty with the attacker. Source: Etherscan

The decentralized finance protocol also announced that it already identified the root cause of the attack. It assured the community that shutting down deposits for its public-facing vaults already “nullifies the attack any further” because a deposit is required for the attack vector. 

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The protocol also explained the steps it would take moving forward. According to Gamma, it will be getting a third-party code review to ensure that the attack is mitigated before reopening deposits. The company also highlighted that it would maximize recovery for all the affected users. 

The firm apologized to those affected and promised to release a more detailed post-mortem analysis and a proposed remediation plan in the coming days. 

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