We’ve been monitoring activity on the protocol throughout the day, and after disabling ETH quoting on our frontend, we are now observing, in the last few minutes, hacked funds arriving in the form of USDC after having been swapped on
@Uniswap via our frontend swapping service at
swap.chainflip.io, one of many interfaces (aka brokers) that connect to Chainflip.
We are putting our own frontend into maintenance mode until we finish deploying more robust protections for the
$ETH chain to prevent illicit funds from making it through the protocol. All brokers that open deposit channels for the Chainflip protocol will then be able to instruct the network to reject an incoming deposit if it detects illicit flows using a screening tool of their choice.
This has been effective for
$BTC since we launched it a few months ago, but it’s clear we must now do the same for
@ethereum. Once this is in place, Chainflip will no longer be usable for moving any funds linked to this or other major hacks and incidents. We work with
@elliptic to identify suspicious transactions and cut off access to the swapping app for high-risk accounts.
The protocol will continue to function as usual. It is fully decentralized, with 150 nodes running it, and will continue serving users of other interfaces if they choose to continue offering access. However, the 10 or so LPs that are active on the protocol are not providing much liquidity right now in light of the situation, so we recommend checking your slippage limits closely if you decide to swap over the next couple of days.
This has been a busy Saturday, but we are really glad to see so much support for Chainflip as we take steps to prevent the perpetrators of the largest hack in crypto from accessing funds to give to a rogue, cruel, criminal state. Together, as an industry, we can combat this.
cc
@Bybit_Official @benbybit