Leading decentralized exchange (DEX) Curve Finance sustained a $70 million exploit on Sunday after hackers attacked its liquidity pools. To reduce the liquidation risks of a big loan collateralized by CRV tokens, Curve founder and CEO Michael Egorov sold nearly $40 million in CRV tokens to different parties, including Tron founder Justin Sun. If the loan is liquidated, it could create more selling pressure for the native token of the defi platform.
Justin Sun Bought 5 Million CRV Tokens
On-chain data showed that Michael Egorov, founder and CEO of Curve Finance DEX, has sold millions of CRV tokens in over-the-counter transactions to multiple parties.
Among those involved in the sales was Tron Founder Justin Sun, who bought 5 million CRV tokens from Egorov. Additionally, Curve CEO sold 3.75 million CRV tokens to NFT owner Jeffrey Huang, 2.5 million to DWF Labs, and another 2.5 million CRV to decentralized finance (DeFi) protocol Cream Finance.
Blockchain data revealed that Tron’s Sun acquired roughly 5 million CRV from a wallet dubbed “Curve.fi Founder” at an average token price of $0.4, valued at more than $2.3 million. The move comes after a significant exploit on Curve Finance on Sunday that sent the price of its native token tumbling.
The price crash placed Egorov’s large loan position at risk of liquidation. The concerns led to a bearish sentiment among investors, who were worried that liquidated assets would have to be sold in a market where prices are already on a downtrend. Egorov held around $60 million in stablecoins on Aave alone, collateralized by $175 million in CRV. If those funds were to be liquidated, it could result in bad debt across several lending protocols.
Persisting DeFi Hacks and Crypto Rug Pulls
The Curve Finance exploit occurred after the DEX suffered a series of cyber attacks on July 30, with hackers siphoning over $70 million in crypto funds. The perpetrators targeted several liquidity pools, although the actual damage was allegedly closer to $50 million as white hat hackers orchestrated some of the attacks.
Nevertheless, the hack represents the latest in a series of attacks in the growing DeFi space. This trend has existed for some time, with DeFi accounting for around 80% of stolen crypto funds in 2022.
Apart from DeFi hacks, the broader crypto market has also been plagued with rug pulls – a scam where developers of a crypto project make efforts to attract investor money, only to abruptly shut the project down or disappear, taking investor funds with them. Yesterday, the recently launched BALD token crashed by more than 90% after an alleged rug pull. Interestingly, the on-chain data showed that the wallets to which the funds were transferred allegedly belonged to a person related to Alameda Research and the collapsed FTX or even Sam Bankman-Fried himself.
This article originally appeared on The Tokenist
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