BlockTower Capital and Sonne Finance Hit by Major Exploits: Millions Lost in Crypto Heists

As a researcher with extensive experience in the cryptocurrency industry, I find it alarming that two significant players, BlockTower Capital and Sonne Finance, have been victims of exploits within a short period of time. The combined losses are substantial, with at least $1.9 billion affected between the two incidents.

Two significant players in the crypto world, BlockTower Capital, a prominent hedge fund, and Sonne Finance, a decentralized finance platform, have suffered exploitations leading to substantial financial losses.

BlockTower Loses AUM

As a crypto analyst, I’ve unfortunately encountered yet another instance of hacking in the cryptocurrency space. This time, the unfortunate victim is the prominent hedge fund, BlockTower Capital. The attackers have successfully breached their security defenses and have made off with a substantial portion of their assets under management (AUM), which is reportedly over $1.7 billion.

Trusted insiders have verified the cyberattack, yet the exact particulars of the incident are still under wraps. The company has kept quiet about the matter publicly, but significant business associates have been informed. To investigate the hack and retrieve pilfered assets, the company has enlisted top-tier blockchain sleuths. This action underscores their belief in their ability to successfully recover from this setback.

Previous Troubles For BlockTower

BlockTower Capital has encountered past difficulties. In February 2023, they suffered a hack resulting in a loss of $1.5 million from decentralized exchange aggregator Dexible. Additionally, they have been affected by the demise of Silvergate Bank and Signature Bank, institutions with substantial crypto holdings.

As a researcher examining this situation, I would put it this way: The winding down of our “market-neutral” cryptocurrency fund, which held over $100 million in assets, added to the hurdles we faced. This event underscores our past experience with security vulnerabilities.

Sonne Finance Under Attack Too

On a different occasion, Sonne Finance, a decentralized finance protocol functioning on the Optimism and Base platforms, succumbed to a cyber attack on May 15, leading to substantial financial losses.

As a crypto investor, I first learned about a reported theft worth $3 million from Sonne’s USDC and WETH contracts on the Optimism chain, according to blockchain security firm Cyvers. However, the situation took a turn for the worse within half an hour as Cyvers revised their estimate to a staggering $20 million in stolen funds.

Sonne Finance swiftly responded to a Twitter incident by halting all markets on Optimism, ensuring the security of markets on Base in the process.

After the revelation of the scam, it came to light that an unauthorized Twitter account posing as Sonne Finance tried to take advantage of the situation. The fake account instructed users to rescind their approvals through a questionable link, aiming for more financial gains. Fortunately, the deceptive tweet was removed swiftly.

Security Exploits Plague Crypto Industry

The issue of cryptocurrency thefts persists in the sector, resulting in substantial financial losses since the beginning. In 2022, cybercriminals walked away with a staggering $4 billion, which was followed by another $2 billion stolen in 2023. Although there was a remarkable decrease of 65% in hacking cases by April 2024, the financial damages remain considerable. According to the latest SlowMist Weekly Security Report covering the period from April 28 to May 4, 2024, crypto-related security breaches resulted in losses worth $71.39 million.

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2024-05-15 15:08