Unizen, a decentralized finance (DeFi) protocol, has declared that it will reimburse users who lost $750,000 or less as soon as possible following a security breach that resulted in the loss of approximately $2.1 million in user funds.
On March 9, blockchain analytics firm PeckShield flagged an “approve issue” with the DeFi platform, revealing that over $2 million had already been drained. In response, the security firm advised users to revoke approvals from the trade aggregator to prevent further losses. Security company SlowMist estimated the exploit losses to be around $2.1 million and noted that the attacker exchanged Tether (USDT) for the stablecoin Dai (DAI).
The day after the incident, the DeFi protocol sent a message to the hacker on the blockchain, offering a 20% reward in exchange for returning the remaining stolen funds. The protocol also stated that it is collaborating with law enforcement and forensic experts to identify the hacker.
While negotiations for the reward are still in progress, the DeFi protocol has promptly refunded the victims of the hack. On March 11, the company announced that it would reimburse 99% of the affected users as soon as possible.
“We will immediately provide reimbursement to the remaining affected wallets. Although our intention is to initiate distributions today, we are meticulously reviewing each distribution individually,” the company stated.
According to the announcement, Sean Noga, the founder and CEO of Unizen, loaned funds to the company to compensate the victims of the hack. Users who lost less than $750,000 will have their funds returned, with refunds commencing on March 11.
The company will refund the funds in either USDT or USD Coin (USDC). However, for those who lost more than $750,000, the DeFi protocol stated that they will handle the matter on a case-by-case basis. In addition to the announcement, the company shared a video guide instructing users on how to review and revoke approvals within the platform to prevent further losses.
Unizen’s chief technology officer, Martin Granström, revealed that they have already gathered enough evidence for a post-mortem report and are collaborating with third-party firms regarding the incident. Granström announced that they will soon release an incident report and pledged to invest more in security in the future.