The cryptocurrency world bills itself as an improvement and alternative to traditional finance. However, there are still things happening with cryptocurrencies and the blockchain that would never happen with credit unions or banks...and that's a good thing.
Recently, Poly Network, a DeFi platform, was hacked for over $600 million in crypto. Poly Network lets people transfer cryptocurrencies across blockchains. DeFi means it is a decentralized finance platform. DeFi provides some of the same financial products found in traditional finance, such as loans and interest-bearing accounts. Part of Poly Network's tagline is "building the next generation internet."
Before the Poly Network events, DeFi hacks resulted in $361 million in crypto being lost this year alone. That's up 3X compared to 2020.
A trip to the Poly Network website at poly.network, you'll notice there is no phone number or address anywhere. That is certainly in stark contrast to traditional finance. However, it is not uncommon. Poly Network seems to derive from a Chinese blockchain. So we aren't even entirely sure which country this company is based in. That matters because no U.S.-based crypto exchange has been hacked.
The weird thing about this hack is that the hacker gave back all but $33 million of the funds and stated that the hack was just for fun. Bringing the weirdness to a whole other level, the following statement is from Poly Network, "After communicating with Mr. White Hat, we have come to a more complete understanding of how the situation unfolded and Mr. White Hat's original intention. We offered a USD500,000 Bug Bounty, and Mr. White Hat responded to the offer."
No information about the hacker has come to light yet. It's unclear if the hacker provided Poly Network with a name or if they are just using a filler name for now. But when has a credit union or bank ever been robbed, had the robber return the majority of the money, then offer to pay the robber for their efforts? The authorities would certainly be involved regardless of any deal the hacker and financial institution tried to make.
If Crypto really wants to be an alternative to traditional finance, it has a long way to go. Hacks are still rampant, and crypto remains the go-to source for ransomware transactions.