A cryptocurrency exchange reached an agreement with cybercriminals who hacked into millions, marking increased security issues in the digital currency industry.
Loopscale revealed on April 28 that the attackers involved in a recent $5.8 million heist committed to returning the majority of the stolen money in return for a reward payment.
Hackers Agree To 10% Bounty After Platform Hack
As reported in posts posted on X (formerly Twitter), Loopscale was able to negotiate successfully with the attacker who had compromised their system on April 26. The deal permits the attacker to retain 10% of the stolen cryptocurrency as a “bounty” and return the other 90% to the platform. This amounts to around 3,947 SOL (Solana tokens) for the attacker, and 35,527 SOL returns to Loopscale.
At 3:52PM ET today, we received a response from the exploiter. They have indicated a willingness to return the exploited funds in exchange for a bounty.
We appreciate their engagement so far and we are actively working to reach an amicable resolution.
As such, we will be… https://t.co/znCZxtoi1z
— Loopscale (@LoopscaleLabs) April 28, 2025
The firm appreciated the hacker for consenting to the settlement and assured that they would provide updates on when vault withdrawals would resume. They further assured that they would release a detailed analysis of how the attack occurred and what they learned during the process.
Technical Vulnerability Led To Multi-Million Dollar Theft
Reports indicate the hack was not a straightforward break-in but rather sophisticated manipulation of Loopscale’s pricing mechanism. The attacker manipulated the RateX PT token pricing mechanism, enabling them to withdraw around $5.7 million in USD Coin and 1,200 Solana tokens from platform vaults.
Upon finding the breach, Loopscale immediately suspended all withdrawals on their vaults and halted trading on their markets. The firm clarified that only users who had deposited funds in their USDC and SOL vaults were impacted by the attack, not the overall RateX collateral system.
Legal Immunity Provided As Part Of Negotiation Tactic
In response to the timeline provided by Loopscale, the company reacted swiftly to take care of the issue. They offered the attacker the bounty deal on April 27, the day following the hack. The 10% payment was complemented by dropping any legal pursuit against the hacker.
The site provided the hacker with a deadline of 6 AM EST on April 28 to react to the offer. The timeline closure did the trick, and the hacker accepted the proposal with an indication of willingness to refund the money in return for the reward as promised.
Today both @LoopscaleLabs and @term_labs got hacked and lost millions each
How safe is actually all this defi?
We are chasing yield, but hack-adjusted is it actually better than just holding bonds? https://t.co/dnhw6n9yol
— Tim Haldorsson (@TimHaldorsson) April 26, 2025
The Loopscale incident comes on the heels of another breach at Term Finance, raising alarm bells throughout the cryptocurrency industry. Tim Haldorsson, founder of Lunar Strategy, voiced serious concerns about whether potential returns in decentralized finance justify the mounting security risks investors face.
Record-Breaking Quarter For Cryptocurrency Security Breaches
The Loopscale attack is one of a disappointing trend of increasing cryptocurrency platform assaults. Security insiders say that more than $1.6 billion was stolen as a result of crypto hacks between the first three months of 2025, the worst quarterly period for security breaches in history.
The trend is that as the value and usage of cryptocurrency grow, platforms have more difficulty protecting user funds from increasingly sophisticated attacks. For some firms, direct negotiation with hackers has become a pragmatic, if contentious, way to recover stolen assets when conventional law enforcement approaches might be too slow or ineffectual.
Featured image from Telkom University, chart from TradingView
