GMX Hacker Returns $42 Million, Receives $5 Million Bounty, Stock Jumps 18.4%

A crypto hacker who had drained $42 million from the decentralized crypto perpetuals exchange GMX has taken an unexpected turn by returning the stolen funds. In exchange for this act, the hacker has been rewarded with a $5 million bounty. This development was announced by GMX on the social media platform X, where they detailed that the hacker had exploited a vulnerability in the Arbitrum-based liquidity pool, resulting in the theft of $42 million worth of crypto assets.

The hacker, who had initially transferred part of the funds to an unknown wallet, has now returned the stolen assets. GMX confirmed that the remaining funds, after the payment of the $5 million bounty, are now securely held in the GMX Security Multisig. The decentralized autonomous organization (DAO) is currently working on a proposed distribution plan for the recovered funds, which will be presented to the GMX community for approval.

The exploit, which occurred on July 9th, was identified as a re-entrancy attack. This type of hack targets smart contracts by exploiting a vulnerability that arises when a smart contract makes a call to another before updating itself, allowing for an external malicious contract to interfere. GMX assured that the exploit was limited to GMXV1 and that V2, its markets and liquidity pools, as well as the ecosystem’s native asset, remained unaffected.

The return of the funds has had a positive impact on the market sentiment surrounding GMX. The digital asset saw a significant increase in value, trading at $13.36 at the time of the announcement, marking an 18.4% increase over the last 24 hours. This turn of events highlights the importance of security measures in the crypto space and the potential for hackers to be incentivized to return stolen funds through bounty programs. The incident also underscores the resilience of the GMX ecosystem, which was able to recover from the exploit and implement measures to prevent future attacks.