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- Zoth Protocol Hacked: $8.4M Stolen, Funds Converted to DAI in Major Security Breach.
- $8.4M Drained from Zoth: Hackers Swap Stolen Funds to DAI, Evading Recovery.
- Zoth Suffers $8.4M Breach: Website Offline as Investigation into Hack Begins.
Zoth, also known as the restaking protocol that Borderless and Blockchain Founders Fund backs, was hacked. Crypto security firm Cyvers Alerts shared a post on X that there was an $8.4 million value of cryptocurrency stolen from the protocol’s deployer wallet. This attack was commenced after the hackers managed to modify a proxy contract that was related to it.
The contract became compromised at the name “USD0PPSubVaultUpgradeable,” which was upgraded 30 minutes before the incident. The upgrade was linked to a contract made by an address associated with the scammer. Next, an amount of $8.4 million in the form of stablecoin USD0++ was transferred to the attacker, which was then instantly swapped to DAI. The money was sent to another account, further making it nearly impossible to retrieve the cash stolen by the fraudsters.
As a result of the breach, Zoth pulled down its website from the internet as a preventative measure. The site is still in maintenance mode, but the protocol has not elaborated much about the actual issue. Following the attack, Zoth issued a statement stating that the protocol system “has experienced a security breach.”
The crypto community is currently waiting for Zoth as they strive to find the solution. This is not the last update as the platform continues with an assessment of the attack and enhancing the security measures. The occurrence is an important reminder of the dangers that decentralized protocols require when interacting with high volumes of user deposits.
Zoth’s $4M Funding Round
Zoth was launched in January 2023 by Pritam Dutta and Koushik Bhargav, which recognized them through its tokenized liquid notes. They are backed by highly reliable instruments such as The U.S. Treasury bills and corporate bonds, which have high ratings. The funding round was conducted in August 2024, and the protocol gathered $4 million from investors.
The interested investors were Taisu Ventures, G20, fat Cat Ventures, and Gemhead Capital. Other angel investors occupied the funding as well as first investments from firms like Coinbase and Hedera and XRPL Foundation grant. The breach posed a huge loss to Zoth, which was advancing in the decentralized finance (DeFi) market.
The particular case is indicative of the misimplementation of blockchain-based platforms. Still, some information about its progress in regaining the public’s confidence has not yet been released, and the crypto community continues to look at Zoth. The breach underlines the need for adequate security solutions in DeFi protocols. There is no clear outcome yet regarding the stolen funds during investigations.
