Despite a number of recent high-profile thefts targeted cryptocurrency projects, investors haven’t been scared away from the sector.
As The Wall Street Journal reported Wednesday (April 27), some investors are actually investing more.
For example, the owner of crypto platform Wormhole gave $320 million to the project in February, one day after a hack. Gaming company Sky Mavis Ltd managed to pull together a $150 million investment to reimburse the victims of a hack in March that targeted the online game Axie Infinity.
And now Beanstalk, an ethereum decentralized finance (DeFi) protocol, is hoping to raise more than $76 million, the amount it lost in a hack two weeks ago.
As PYMNTS reported at the time, the hacker in this case used a flash loan exploit to drain Beanstalk’s funds, employing Uniswap to trade DAI, USDC and USDT for ethereum, which helped them take in 24,830 ethereum.
Around the same time, Elephant Money, the DeFi protocol behind the ELEPHANT token, reported that hackers had swiped $11.2 million worth of Binance Coin as the company apparently experienced an “automated attack” on its treasury.
“It took a significant amount of capital to bust through the system’s defenses. Over $261M in volume,” the company said on Medium. “Every time bad actors win it hurts the entire space. There are prominent teams that were aware of weaknesses and stood by and did nothing at your expense. Even after I and other community members asked them to disclose.”
According to the Journal story, while infusions from investors can help blockchain firms weather crises, attorneys and security experts warn that such funding in an unregulated, crime-rife sector carries risks.
Crypto investors see these bailouts as part of the territory, Richard Muirhead, chairman of London venture capital firm Fabric Ventures, told the Journal.