It’s been a tough year for Platypus Finance, an Avalanche network-based DeFi protocol that makes markets for stablecoin swaps. Last week, Platypus experienced its third exploit of 2023. That’s the bad news. The good news is, 90% of the $1.6 million taken during this latest incident was recovered through negotiation with the person responsible. It has become fairly common practice for grey hat hackers to return all but 10% of their take, calling it a bug bounty and freeing themselves of risk of prosecution. This is probably the best case scenario for an exploiter, since converting large sums of purloined crypto into spendable cash is difficult and risky.
Evertas Professional Services offers stolen crypto asset recovery as a supplemental service supporting crypto insurance policies.
A first step in the recovery of stolen crypto assets is determining their recoverability.
Recoverable: Evertas traces the funds to a KYC/AML-compliant fiat off-ramp, such as an exchange, in a Financial Action Task Force (FATF)-compliant jurisdiction where there is sound rule of law. Generally, such exchanges and civil courts are willing to cooperate on crypto asset recovery due to fraud or other crime.
Potentially Recoverable: Evertas traces the funds to a self custodial, unhosted wallet, meaning, one that is managed directly by a user and can be disconnected from the internet, and for which no attribution data exists. Evertas will monitor this wallet until funds either move to an accessible, KYC-compliant fiat off-ramp—at which time they become recoverable—or to a mixer, bridge or non-KYC-compliant fiat off-ramp, in which case they become…
Not Recoverable: Evertas traces funds to a mixer, cross-chain bridge or a non-KYC-compliant off-ramp in a non-FATF-compliant jurisdiction. Under these circumstances, asset recovery becomes much more difficult, if not impossible. The remaining option here is to send the data collected to relevant law enforcement in support of an eventual criminal indictment.
In cases where funds are successfully recovered, Evertas oversees the storage, management, and potential sale of crypto assets. Having a single point of contact for these varied functions simplifies things for the client who would otherwise be forced to manage relationships with various exchanges, custodians, auction houses and other infrastructure providers, each of which add friction and cost.
If your web3 project has been hacked or exploited and funds stolen, contact our crypto asset recovery professionals as early in the process as possible. Every moment that passes works to the thief’s advantage.
