Crypto Market Maker Wintermute Loses $160 Million in DeFi Hack

Wintermute, a leading crypto market maker, has lost about $160 million in a hack, a top executive said Tuesday, becoming the latest firm in the industry to suffer a breach. From a report: Evgeny Gaevoy, the founder and chief executive of Wintermute, disclosed in a series of tweets that the firm's decentralized finance operations had been hacked, but centralized finance and over the counter verticals aren't affected. He said that Wintermute -- which counts Lightspeed Venture Partners, Pantera Capital and Fidelity's Avon among its backers -- remains solvent with "twice over that amount in equity left." He assured lenders that if they wish to recall their loans, Wintermute will honor that.

"Hack"? DeFi does not "get hacked".

[Anonymous Coward]

If it's making use of the thing as written then it's not a "hack", nor an "attack", or anything else. It's sheer DeFi designer lack of foresight and skill.

This is the natural consequence of wanting "smart contracts", with the entirety of the "law" governing the "smart contract" stuffed into the "smart contract" itself.

So stop blaming others, eh.

Re:

[awwshit]

Real 'smarts' in there, obviously.

Re:

[Rei]

"Hey, let's make transactions be automated, with no human steps required and no revokability! This will definitely be a good idea, and I'm definitely really smart for doing thisl"

Re:

[GoTeam]

Probably not true, but with some of these "crypto market makers" (fake term) I wonder if the primary investors are the ones behind the "hacks". It would be risky as hell, but everything about being a crypto market is risky as hell. (my evidence is a wild hair I pulled out of my a**")

Re:

[rudy_wayne]

WTF is a "crypto market maker"?

Crypto is bullshit to begin with and this just sounds like extra bullshit topping.

Re:"Hack"? DeFi does not "get hacked".

[FictionPimp]

The same bullshit in normal investments

The term market maker refers to a firm or individual who actively quotes two-sided markets in a particular security, providing bids and offers (known as asks) along with the market size of each. Market makers provide liquidity and depth to markets and profit from the difference in the bid-ask spread. They may also make trades for their own accounts, which are known as principal trades.

Re:

[Rei]

Yep. Basically they take the risk of holding a security they're not looking to invest in for a little while in order to match up buyers and sellers who want to buy / sell at different times, in exchange for a cut for themselves (the bid/ask spread).

The lower the liquidity (the less frequent the buyers / sellers are) and the more volatile the security, the bigger the bid-ask spread needs to be for them to justify the risk.

They usually try to neutralize risks where possible by playing both sides of a given se

Greedy amateurs with delusions

[gweihir]

Compare that to real banks, remember how many of them are there, and then look how many had anything like this stolen from them in a hack.

There really is no explanation for something like this besides gross negligence. Those responsible (including the CEO) should go to prison for this.

Re:Greedy amateurs with delusions

[The-Ixian]

But, don't worry! They still have lots of money left!

Re:

[gweihir]

Haha, yes! That statement was utterly hilarious! "We can continue the scam, we still have plenty of victims left!"

Re:Greedy amateurs with delusions

[Slayer]

There have been hacks like this [wikipedia.org], a lot more happens [theregister.com] and is never much discussed. And of course there are rug pulls [wikipedia.org] and fraud of epic proportions [wikipedia.org].

And yes, these scandals still seem to be rare compared to crypto exploits and rug pulls, however:

1. - Nobody reports about overseas sub 10 million bank scams, but they do happen. Crypto scams draw a lot more attention, and they can not be denied thanks to their public ledger.
2. - Insurance like FDIC covers a lot of malfeasance. Few people complain about a failed regional bank (of which there are thousands) as long as FDIC picks up the tap afterwards.
3. - Banks attract savings, whereas cryptos should attract mostly YOLO money. In terms of risk they are much closer to startup tech companies than to banks. Comparing applles and oranges ...

Re:

[gweihir]

1. - Nobody reports about overseas sub 10 million bank scams, but they do happen.

Actually, this still gets reported in the IT security community, just not in the general press. It very rarely happens.

And nothing of value...

[doragasu]

... was lost.

another insider?

[zabinfinal14]

could be just one of the core team members stealing funds lol

Jewish lightning

[sdinfoserv]

Seeing the end of crypto, they likley nuked it themselves and claimed "hacked!". Old timers (and the mob) used to call this a jewish fire. Run up the credit and purchasing power of business and torch it as you're running out the door - then collecting the insurance. It doesn't pass todays PC obsessed world, but it is what it is... https://en.wiktionary.org/wiki... [wiktionary.org]

Hacking is a feature not a bug.

[fredrated]

Stupid people pool a lot of money then smarter people run off with it. That's the way the world works.

This is news?

[smooth wombat]

Every week there is another story about some "hack" related to crypto. At this point we'll just have to live with it.

Let us know when a week goes by when there isn't a "hack". That will be newsworthy.

Neuromancer reference?

[devslash0]

The name "Wintermute" sounds familiar...

Re:

[nanolith]

Yeah... there is some unintentional irony in the name.

I guess that their investors and users thought that they were Case when they were really Armitage.

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[skaag]

Exactly right - knowing the actors, this is all staged with the money now owned by the AI.

Bunch of words that make no sense

[paul_engr]

All made up shit. Put your money into this imaginary money nonsense blahblah.. oh it's gone! (Benny hill music and decapitated chickens)

Fish in a Barrel

[laughingskeptic]

At this point criminals likely have a lookup for all possible Ethereum keys (and any other block chain using similar key/address schemes) generated by the aptly named "Profanity" key generator. Now they are simply testing addresses on the block chain and stealing from vulnerable addresses. It sounds like a number of wallets need to be replaced ASAP.

The issue: https://github.com/johguse/pro... [github.com]