AFX Trade Loses $24M in USDC Exploit, Offers Hacker 30% to Return Funds

AFX Trade, a decentralized perpetuals exchange on the Arbitrum network, has reported a loss of approximately $24.15 million due to a security breach affecting its USDC custody bridge. Following the incident, AFX quickly suspended operations on the bridge and initiated an investigation to determine the specifics of the attack. Security firm Blockaid confirmed the exploit, while on-chain analysis revealed that the stolen USDC was converted into 12,468 ETH, subsequently moved to a single wallet.

Steven Goldfeder, co-founder of Arbitrum, emphasized that the main Arbitrum network and its native bridge were not compromised, remarking that the breach originated from a third-party protocol. AFX has declared that the incident appears restricted to its custody bridge and intends to collaborate with security firms and ecosystem partners to trace the stolen assets.

In a bid to recover the funds, AFX has publicly offered a deal to the hacker, suggesting that they could keep 30% of the stolen amount as a "white hat bounty" if they return the remaining 70%. This strategy aligns with a growing trend in the cryptocurrency space, where some projects publicly negotiate with hackers to recover stolen assets. Ken C, AFX's head of growth, confirmed the offer on social media, stating, "We hope for a constructive resolution." Such initiatives reflect the difficult landscape for decentralized finance (DeFi), which has faced significant challenges throughout the year due to various exploits and hacks.