Unizen Announces Compensation for Victims After $2.1 Million DeFi Security Breach

Illustration of Unizen's proactive steps in addressing a $2.1 million DeFi security breach

In an unprecedented move within the decentralized finance (DeFi) sector, Unizen has announced its plans to reimburse victims of a recent security breach that led to the loss of approximately $2.1 million in user funds. The breach, identified and assessed with the help of blockchain analytics firms PeckShield and SlowMist, has put a spotlight on the urgent need for enhanced security measures within the DeFi ecosystem.

Comprehensive Analysis Leads to Swift Action

On March 9, PeckShield was the first to detect an “approve issue” within the Unizen platform, which led to the discovery that over $2 million had been illicitly withdrawn. SlowMist’s subsequent investigation confirmed the total losses to be around $2.1 million, revealing that the stolen funds had been converted from Tether (USDT) to Dai (DAI) through an exploited vulnerability in an Ethereum-based contract.

Proactive Response and User Reimbursement

In response to the theft, Unizen took immediate action by reaching out to the hacker with an on-chain message, offering a 20% bounty for the return of the stolen assets. The company has also collaborated with law enforcement and forensic experts to trace the hacker’s identity and secure the return of the funds.

As negotiations with the hacker continue, Unizen has declared its intention to start compensating 99% of the victims immediately. The company’s founder and CEO, Sean Noga, has provided personal funds to facilitate these reimbursements, ensuring users who suffered losses below $750,000 are prioritized. For those whose losses exceed this threshold, individual cases are being addressed separately.


Strengthening Security Measures

In the wake of the breach, Unizen has emphasized its commitment to bolstering its security framework to prevent similar incidents in the future. Martin Granström, Unizen’s Chief Technology Officer, stated that evidence collected thus far will be used to compile a comprehensive incident report, to be published in collaboration with external third-party firms.

This incident serves as a stark reminder of the vulnerabilities present within the DeFi sector. Just last month, Seneca Protocol suffered a security compromise that led to a significant loss in digital assets, underscoring the critical need for continuous improvement in security protocols to safeguard user investments against sophisticated online threats.

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