Munchables Developer Returns $62.8M in Ether Post-Exploit

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Munchables had announced on March 27 that one of its developers, who was responsible for the recent breach, had returned $62.8M worth of Ether.

This development came after a series of negotiations with the developer, who decided to return the stolen funds and assets without demanding a ransom.

Munchables Collaboration With Blockchain Investigates Yields Recovery

The GameFi platform disclosed in an X post that the identified hacker has cooperated and “shared all the private keys involved to assist in recovering the user funds.” That includes the private key, which holds $62.53M, another linked to 73 Wrapped Ether (WETH), and the owner key that has the remaining funds.

This recovery was a result of Munchables’ announcement of a breach on its platform on March 26, where it revealed plans to actively track the hacker’s movement in an attempt to intercept transactions.

Meanwhile, blockchain investigator ZachXBT was quick to respond to the gaming platform distress announcement with the address of the alleged hacker, which had a balance of $62.45M in Ether.

According to DeBank data, the identified wallet address transaction history showed interactions with Munchables protocol at 9:26 am UTC and a movement of 17,413 ETH.

DeBank Data revealed a hacker address with 17,413 ETH from Munchables

This was followed by a transfer of $10,700 worth of ETH from the hacker’s address through the Orbiter Bridge, with an additional 1 ETH sent to a new wallet address.

ZachXBT claimed that a North Korean developer hired by Munchables, with the alias “Werewolves0943,” perpetuated the theft.

Munchables had also confirmed that the identified hacker was one of its ex-developers and updated users on the situation following an hour of negotiations, during which the hacker agreed to return the stolen funds.

In response to the stealing and quick recovery of the funds, the creator of the Ethereum layer-2 blockchain Blast, with the pseudonym Pacman, reiterated that the ex-developer chose to voluntarily return funds without pressing any demands.

He further disclosed that Blast will support the Munchables team to distribute funds back to users freely while warning victims of the hack to be wary of refund scams.

Pacman acknowledged and appreciated the important role that ZachXBT played behind the scenes to aid the recovery of funds.

Munchables Breach Threw Questions on Decentralized Networks Ethos

Munchables is a new Blast-based GameFi platform that revolves around NFT creatures. The protocol enables players to stake BlastETH and Blast USD to farm Blast points and get in-game perks as rewards.

In the heat of its breach that led to an eventual theft, crypto community members on X, particularly @OxCygaar, suggested that the Blast team could intervene and return stolen funds since they controlled the bridge contract that holds funds and assets.

To do this, the Blast team would need to force an invalid state root, which would essentially erase the hacked transaction. However, this process would likely require halting the entire chain, which could have significant implications and disrupt operations.

However, others opposed the idea as it is believed to promote centralized intervention, which runs against the ethos of decentralized networks.

Cinneamhain Ventures partner Adam Cochran noted that it wouldn’t be out of character for Blast to step in and recover funds.

He disagreed with centralized intervention but reiterated that Blast is not a brand of important decentralization chain but a hub for games.

OxCygaar and Cochran’s remarks highlight a debate within the crypto community about the balance between decentralization and user protection in cases of security breaches.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.