North Korean hackers recently suffered a significant loss of $458,000 when their attempt to speculate on Ethereum through the decentralized platform Hyperliquid failed.
The hackers deposited $476,489 USDC into Hyperliquid and initiated a long position on Ethereum at a price of $3,791.8. However, due to a market downturn, the position was liquidated when Ethereum's price fell to $3,251.8, leaving the hackers with only $18,187 USDC in their wallet.
This incident has raised concerns about the security measures in place on Hyperliquid, particularly due to its limited number of validators. With only four validators, there is a higher risk of a security breach, as the compromise of just three validators could enable unauthorized withdrawals. These concerns are further heightened by the fact that North Korean-linked addresses have collectively lost over $700,000 on the platform in the past week alone.
Experts have proposed measures to enhance security, including the potential use of Circle to blacklist addresses associated with hacking activities and the authority of the Arbitrum chain's multi-signature council to roll back transactions during emergencies. However, the use of rollbacks has sparked controversy within the crypto community, as it challenges the principle of decentralization.
This incident serves as a reminder of the risks associated with speculative trading in cryptocurrencies, where even experienced traders can face significant setbacks.