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Coinbase Gets $1M Amid The Hack But Doesn’t Reimburse The Victims

The validator receiving the respective payment operates under Coinbase, turning the crypto exchange into an unwitting beneficiary.

Jay Hicks



Coinbase for pension shares

In July, the exploit of Curve Finance momentarily decreased the prices. a trading bot recompensed 570 ETH to benefit from the rare arbitrage opportunity. The validator receiving the respective payment operates under Coinbase (the top crypto exchange in the United States), turning the crypto exchange into an unwitting beneficiary. Alchemix, the victim of the exploit requested Coinbase to carry out a refund.

Coinbase Gets Up to $1 Million in the $73M Exploit of Curve Finance

Nonetheless, the platform has not returned the funds. Coinbase received almost a $1M profit connected to the respective incident, as per the market observers and participants. However, the company has not returned the inadvertently acquired money to the victims. The strange situation has its roots in a peculiar feature of the infrastructure related to the DeFi economy.

Also Read: Coinbase CEO Calls for Gary Gensler’s Exclusion from SEC

When Curve witnessed the exploit of up to $73M, the asset-pricing mechanism of the company went through a brief slump. A trading bot detected this situation and attempted to leverage the exceptional arbitrage opportunity. Hence, the bot paid up to 570 ETH (approximately $1.06M at that time). The move intended to ensure that a blockchain validator on Ethereum processed the trade as shortly as possible.

Crypto Exchange Expresses No Intention to Return the Funds to the Victims

The respective payment was the 2nd-largest figure ever linked to the practice named MEV. The Ethereum network operates under Validators. In this case, the payment went to Coinbase as it was also among the validators, as per Flashbots and Alchemix. Flashbots plays a chief part in MEV while Alchemix lost funds during the exploit.

Although the victims of the exploit have received nearly $73M of the lost funds, Alchemix protocol’s request witnessed a rejection. The crypto exchange has expressed no inclination to give back the funds, despite deliberately leveraging the exploit, Alchemix claimed in a recent statement.

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