Following a security breach resulting in the loss of approximately $2.1 million in user funds, decentralized finance (DeFi) protocol Unizen has taken swift action to address the situation. The platform announced plans to reimburse users who lost up to 750,000 units, aiming to restore 99% of affected users’ funds as quickly as possible.
Unizen to reimburse 99% of affected users’ funds
The incident came to light on March 9 when blockchain analytics firm PeckShield identified an “approve issue” with the DeFi platform, signaling that over $2 million had been drained. Users were urged to revoke approvals from the trade aggregator to prevent further losses.
Security company SlowMist estimated the exploit losses at $2.1 million, revealing that the attacker had exchanged Tether for the stablecoin Dai. Unizen wasted no time in responding to the breach. Within a day, the DeFi protocol reached out to the hacker via an on-chain message, offering a 20% bounty in exchange for returning the remaining stolen funds.
Simultaneously, the company initiated collaboration with law enforcement and forensic experts to identify the hacker. While negotiations for the bounty continued, Unizen prioritized refunding victims of the hack. On March 11, the company announced its plan to reimburse 99% of the affected users, starting with those who lost less than $750,000.
Addressing the hack and prioritizing user reimbursement
Founder and CEO Sean Noga stepped in, loaning funds to the company to facilitate the refunds. Reimbursements will be provided in either USDT or USD Coin, with the process beginning immediately for eligible users. However, for those who incurred losses exceeding $750,000, the DeFi protocol stated that each case would be addressed individually.
Accompanying the reimbursement announcement was a video guide instructing users on how to review and revoke approvals within the platform to mitigate further losses. Unizen’s chief technology officer, Martin Granström, assured stakeholders that evidence had been gathered for a post-mortem report, and the company was collaborating with third-party firms to investigate the breach thoroughly.
Granström emphasized Unizen’s commitment to transparency, promising to share an incident report and invest more in security measures moving forward. By taking decisive action and demonstrating accountability, Unizen aims to restore user confidence in its platform and safeguard against future security threats.
As the DeFi space continues to evolve, incidents like these underscore the importance of robust security measures and proactive risk management strategies. While no system can guarantee absolute protection against cyber threats, DeFi protocols must remain vigilant and responsive to safeguard user assets and uphold the integrity of the ecosystem.
