Huge Amounts of Crypto Assets Stuck in DeFi Bridge Contracts

Huge Amounts of Crypto Assets Stuck in DeFi Bridge Contracts

Vitalik Buterin’s Wallet among Millions Trapped in DeFi Bridge Contracts

Arkham Research has uncovered multiple crypto whales’ wallets stuck in decentralized finance (DeFi) bridge contracts. These wallets were left dormant with assets worth millions of dollars for extended periods.

Per the report, Ethereum co-founder Vitalik Buterin’s wallet alone holds assets valued at over $1 million, immobilized for more than seven months within these DeFi bridge contracts. There are also wallets associated with other notable entities that have remained untouched for up to two years.

DeFi bridge contracts are pivotal conduits for asset and data movement across diverse blockchain networks, essential for achieving interoperability within the DeFi ecosystem. However, the functionality of these bridges varies, with some enabling automatic asset retrieval on alternate chains while others necessitate a manual process for fund reclamation.

A wallet, thomasg.eth, had $800,000 in the Arbitrum Bridge for nearly two years. Another, linked to Bofur Capital, contains 27 wrapped Bitcoin (BTC) valued at $1.8 million for over two years and three months.

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Moreover, a wallet tied to NFT user Mike Macdonald has approximately $117,000 in crypto assets following a CryptoPunk sale via a bridge contract. Accordingly, Arkham urged wallet owners to conduct thorough reviews of their assets, noting that there are instances where users may have forgotten about funds originating from certain sources, like CryptoPunks sales.

The investigation revealed that a wallet received 50 Ether (ETH) from Vitalik. The digital asset owner didn’t touch it for seven months, with the asset’s worth increasing to nearly $1 million within the Optimism bridge.

A Coinbase-Linked Wallet 

Notably, a wallet affiliated with the leading crypto exchange Coinbase was identified. It contains assets valued at $75,000 within the Optimism bridge contract for nearly six months. Arkham speculated that this issue stemmed from Coinbase’s attempt to bridge $75,000 worth of USDC to ETH, which was overlooked and awaiting reclamation.

Hence, Arkham Research has urged wallet owners to reclaim their trapped assets promptly, as failure to do so raises concerns regarding the overall integrity and reliability of DeFi infrastructure. The report also warned that bridges are not immune to hacks. For instance, the $650 million Ronin bridge hack, perpetrated by North Korea’s Lazarus Group, exploited vulnerabilities in validator keys, highlighting the security challenges in DeFi infrastructure.

Velvet Capital Halts Operations

Meanwhile, Velvet Capital, a decentralized finance (DeFi) asset management protocol, has suspended its operations temporarily following concerns about a potential phishing attack. The protocol, backed by Binance Labs, took action after reports of unusual activity on its trading platform surfaced on April 23, 2024.

Founder Vasily Nikonov confirmed that users who had confirmed transactions on the platform since April 23 at 5:39 am UTC may risk falling victim to the website hack. Users attempting to access the platform’s front end were prompted to approve wallet access.

In response, Velvet Capital issued a cybersecurity alert urging users to deny all wallet connect requests until further notice. The firm also advised those who had approved fraudulent requests to revoke wallet access immediately to prevent any potential loss of funds.

The team urged users who had conducted transactions on the platform since April 23, 5:39 am UTC, to open a ticket on Discord and provide transaction details for remediation. Despite the front-end issues, Nikonov reassured users that smart contracts remained unaffected and funds on Velvet Capital were secure.

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Cecil Felix
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Cecil Felix

Cecil Felix, a vanguard in crypto journalism, provides incisive perspectives on the digital currency frontier. With a talent for distilling complex blockchain phenomena into digestible insights, Cecil's articles are a touchstone for enthusiasts and experts. His depth and clarity solidify his reputation as a leading crypto commentator

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