Stolen Solana Funds Recovery: Loopscale Negotiates Agreement with Hacker for $5.8M Return
Loopscale's Solana-based DeFi platform has taken a hit after a major breach, leading to a whopping $5.8 million loss. This unfortunate event, which occurred just weeks after its launch, sent shockwaves through the Solana community. The platform lost over $5.7 million in USD Coin (USDC) and approximately 1,200 Solana tokens from its vaults [1].
To prevent further losses, the platform had no choice but to suspend vault withdrawals and freeze its market [2]. Surprisingly, the hacker showing willingness to return funds took everyone by surprise. On April 28th, the hacker responded to Loopscale's offer of a white hat bounty. If the hacker returns around 90% of the stolen assets, they'll receive a 10% reward equivalent to around $594,000, and will be released from any legal actions [2].
The investigation into the breach revealed that it stemmed from manipulation of Loopscale's RateX PT token pricing system. This technical loophole allowed the hacker to artificially adjust the valuation of assets in the vaults, directly impacting depositors in the USDC and SOL pools. Other operations, including the broader RateX collateral system, remain unaffected [3].
Decentralized financial security has been under siege in recent times. In the first quarter of 2025 alone, over $1.6 billion was reportedly stolen across various DeFi protocols, making it the worst quarter for crypto breaches on record. Apart from Loopscale, other high-profile attacks include those on SIR.trading, ZKSync, and KiloEx [3].
Amid the chaos, the Solana price has shown a remarkable resilience, reflecting a +2.99% increase or gain of $4.43 [3]. This bullishness in the Solana network suggests that investor confidence might be returning as the platform implements new security measures and moves toward fund recovery.
With the Solana price and the Solana DeFi protocol, Loopscale is working to reopen vault withdrawals for users and plans to publish a comprehensive postmortem analysis in the coming days. This detailed report will outline the structure of the pricing system vulnerability, the layers of protection that failed, and the security upgrades implemented to prevent future attacks [4].
Loopscale's handling of the breach, particularly its swift bounty negotiation, offers a noteworthy case study for incident management in decentralized finance. The platform's open communication and proposed reasonable whitehat settlement demonstrate an alternative path to hostile legal pursuit. Despite the hack, the Solana price continued to grow, and the Solana network took this hack as a lesson to enhance platform security, pre-planned bounty frameworks integration, and enhanced dynamic pricing protection [4].
The Loopscale breach serves as a significant case study for DeFi security practices, emphasizing the need for robust auditing, continuous monitoring, and effective incident response [5].
References
[1] "LoopScale Suspends Vault Withdrawals After $5.8 Million Breach." Decrypt, 28 Apr. 2025, [https://decrypt.co/81651/loopscale-suspends-vault-withdrawals-after-5-8-million-breach]
[2] "Loopscale Hacker Shows Willingness to Return Funds after Offer of Whitehat Bounty." Cointelegraph, 28 Apr. 2025, [https://cointelegraph.com/news/loopscale-hacker-shows-willingness-to-return-funds-after-offer-of-whitehat-bounty]
[3] "SOL/USD Chart, Published on Tradingview, April 28, 2025." Tradingview, [https://www.tradingview.com/symbols/SOLUSD/]
[4] "Moving Toward Resolution and Platform Recovery." Loopscale, 28 Apr. 2025, [https://loopscale.medium.com/moving-toward-resolution-and-platform-recovery-5f9a1b3c5d36]
[5] "Lessons in DeFi Crisis Response." Loopscale, 28 Apr. 2025, [https://loopscale.medium.com/lessons-in-defi-crisis-response-6e0d4b6d9a93]
- The Solana-based DeFi platform Loopscale experienced a significant loss of $5.8 million, primarily due to the theft of USD Coin (USDC) and Solana tokens.
- The breach led to the suspension of vault withdrawals on Loopscale and the freezing of its market.
- The hacker, showing unusual kindness, agreed to return around 90% of the stolen assets for a potential 10% reward, and they would be released from any legal actions.
- The investigation found that the breach was rooted in a technical exploit of Loopscale's RateX PT token pricing system.
- In the first quarter of 2025, over $1.6 billion was stolen across various decentralized finance (DeFi) protocols.
- Other platforms, such as SIR.trading, ZKSync, and KiloEx, were also victims of high-profile attacks.
- Despite the breach, the Solana price showed resilience, with a +2.99% increase, indicating potential return of investor confidence.
- The Loopscale breach serves as an important case study for DeFi security practices, highlighting the necessity of robust auditing, continuous monitoring, and effective incident response.
