Crypto's No-Fun Hack Week

The Breakdown

Blockworks

Investing, Business

4.8 • 786 Ratings

🗓️ 6 August 2022

⏱️ 17 minutes

🔗️ Recording | iTunes | RSS

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Summary

This episode is sponsored by Nexo.io, Chainalysis and FTX US. One of the biggest challenges to the mainstreaming of crypto is the propensity for novel protocols to be exploited. This week, the Nomad bridge was drained of some $200 million while another vulnerability led to more than 10,000 wallets (largely but not exclusively holding Solana's SOL) being attacked. NLW looks at what happens and what the industry thinks the lessons are. - Nexo is a security-first platform where you can buy, exchange and borrow against your crypto. The company safeguards your crypto by relying on five key fundamentals including real-time auditing and insurance on custodial assets. Learn more at nexo.io. - Chainalysis is the blockchain data platform. We provide data, software, services and research to government agencies, exchanges, financial institutions and insurance and cybersecurity companies. Our data powers investigation, compliance and market intelligence software that has been used to solve some of the world’s most high-profile criminal cases. For more information, visit www.chainalysis.com. - FTX US is the safe, regulated way to buy Bitcoin, ETH, SOL and other digital assets. Trade crypto with up to 85% lower fees than top competitors and trade ETH and SOL NFTs with no gas fees and subsidized gas on withdrawals. Sign up at FTX.US today. - “The Breakdown” is written, produced by and features Nathaniel Whittemore aka NLW, with editing by Rob Mitchell and research by Scott Hill. Jared Schwartz is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsors is “The Now” by Aaron Sprinkle. Image credit: Boris Zhitkov/Getty Images, modified by CoinDesk. Join the discussion at discord.gg/VrKRrfKCz8.

Transcript

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0:00.0	Welcome back to The Breakdown with me, NLW.
0:09.2	It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world.
0:14.8	The breakdown is sponsored by nexo.io, chain aliasis, and FtX, and produced and distributed by CoinDesk.
0:22.8	What's going on, guys? It is Friday, August 5th, and today we are talking about
0:27.2	crypto's No Fun Hack Week. Before we get into that, however, if you are enjoying the breakdown,
0:33.1	please go subscribe to it, give it a rating, give it a review, or if you want to dig deeper into the
0:37.8	conversation, come join us at the Breakers Discord. You can find a link in the show notes or go to
0:42.5	bit.ly slash breakdown pod. Also, a disclosure as always, in addition to them being a sponsor
0:48.5	of the show, I also work with FTX. One weird summer tradition in America is the Discovery Channel's Shark Week programming.
0:57.7	This has been going on since I was a kid and has just exactly as it sounds a ton of programming
1:03.6	about sharks. At the beginning of this week, as we seemed to be beset by hack after hack, I had Shark Week,
1:10.5	which just happened, I think, a couple
1:11.9	weeks ago on my mind, and all I could think about all week was that this was hack week.
1:17.3	Today, we're going to look at what happened and how the crypto industry is interpreting what
1:22.0	needs to happen next, and how the crypto industry is thinking about what the lessons might be.
1:28.4	Let's start at the beginning of the week with Nomad. The cross-chain bridge protocol Nomad was exploited on Monday. Attackers drained
1:35.0	the bridge of essentially all of its funds, approximately $200 million worth of tokens. The Nomad team
1:40.3	acknowledged the exploit in a statement. An investigation is ongoing and leading firms for
1:44.9	blockchain intelligence and forensics have been retained. We have notified law enforcement and are
1:49.3	working around the clock to address the situation and provide timely updates. Our goal is to
1:53.8	identify the accounts involved and to trace and recover the funds. Sam CZ Sun, a researcher at
1:59.6	Paradigm, called the attack, quote, one of the most chaotic
	...

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