Prisma Finance in Deadlock: Funds Missing, 'Good Samaritan' Hacker Demands Public Grovel

Prisma Finance claims $540,000 remains at risk from unlinked accounts following last week's $11.6 million exploit. However, the self-proclaimed "white hat" hacker responsible for the breach demands an apology and public identification of the Prisma team before returning funds.

Prisma Finance Impasse: Funds Unrecovered, 'White Hat' Hacker Demands Apology

Decentralized finance (DeFi) firm Prisma Finance faces an ongoing impasse as it grapples with the aftermath of an exploit that siphoned $11.6 million from its platform. While the company urges users to revoke permissions for an affected smart contract, a self-proclaimed "white hat" hacker responsible for the exploit has withheld the return of funds, demanding an apology and disclosure of the Prisma team's identities.

Unrevoked Smart Contract Permissions Expose Funds

Prisma Finance has identified 14 active accounts that have yet to revoke permissions for the compromised smart contract. Five of these accounts, containing open trove positions totaling over $500,000, remain vulnerable. The largest of these accounts holds $484,380, while the others range from $7,120 to $22,080.

'Path Forward' Prioritizes Fund Recovery and Protocol Resumption

In a recent update, Prisma Finance's core contributor "Frank" outlined the company's "path forward," emphasizing the need to both recover stolen funds and resume protocol operations. However, Frank stressed that the safety of user funds must be ensured first.

Exploiter Demands Apology and Identity Disclosure

The self-proclaimed white hat hacker has accused Prisma Finance of bad faith and has refused to return the stolen funds until the company makes a public apology. The hacker demands that Prisma hold an online conference where the entire team reveals their identities, apologizes for the exploit, and explains the steps they will take to improve security.

Prisma Rejects Demands, Questions Hacker's Intentions

Prisma Finance has rejected the hacker's demands, arguing that there is no evidence to support their claims of good faith. The company has pointed out that the hacker has yet to return any funds, despite expressing a desire to help rectify the mistake.

On-Chain Messaging Fuels Dispute

The dispute between Prisma Finance and the hacker has escalated in on-chain messaging, with both sides exchanging accusations. The hacker has criticized Prisma's communication and has threatened to distribute the stolen funds if their demands are not met.

Funds Swapped, Protocol Value Plummets

Blockchain security firms Cyvers and Peckshield have reported that the hacker has begun swapping the stolen funds into Ether (ETH). Approximately 200 Ether has been transferred to Tornado Cash, a cryptocurrency mixer that has been sanctioned by the US Office of Foreign Assets Control (OFAC). As a result of the exploit, the total value locked on the Prisma Finance protocol has declined from $220 million to $87 million.

Ethical Hacking and Negotiating with Hackers

The Prisma Finance exploit raises questions about the ethical implications of hacking and the wisdom of negotiating with hackers. Some experts believe that engaging with hackers can encourage further attacks and undermine the security of decentralized systems. Others argue that negotiation can be a valuable tool for recovering stolen funds and mitigating the damage caused by exploits.

Conclusion

The standoff between Prisma Finance and the self-proclaimed white hat hacker continues, leaving the fate of the stolen funds and the future of the protocol in limbo. The incident highlights the challenges faced by DeFi projects in the face of exploits and raises important questions about the ethical considerations and best practices in the rapidly evolving world of decentralized finance.