The Binance hacker may have just pulled off one of the smartest crypto moves I’ve ever seen.
First, Tether froze $1.5 billion in USDT.
Then Circle froze another $800 million in USDC.
At the time, it looked like the hacker’s funds were trapped.
But apparently, he had planned for this all along.
Instead of keeping the stolen USDT in a wallet, he allegedly deposited it into Aave and used it as collateral to borrow ETH.
Then he walked away.
This is where the story gets crazy.
Tether can freeze USDT in a wallet.
But it can’t freeze the ETH he already borrowed.
So now Aave is stuck with frozen collateral, while the hacker has liquid ETH.
Unless the protocol can somehow recover the funds, he may not even need to repay the loan.
Two companies froze billions of dollars in an instant.
But someone who knew how to use DeFi may have found a way around both of them.
When you think about it, it’s absolutely crazy.
First, Tether froze $1.5 billion in USDT.
Then Circle froze another $800 million in USDC.
At the time, it looked like the hacker’s funds were trapped.
But apparently, he had planned for this all along.
Instead of keeping the stolen USDT in a wallet, he allegedly deposited it into Aave and used it as collateral to borrow ETH.
Then he walked away.
This is where the story gets crazy.
Tether can freeze USDT in a wallet.
But it can’t freeze the ETH he already borrowed.
So now Aave is stuck with frozen collateral, while the hacker has liquid ETH.
Unless the protocol can somehow recover the funds, he may not even need to repay the loan.
Two companies froze billions of dollars in an instant.
But someone who knew how to use DeFi may have found a way around both of them.
When you think about it, it’s absolutely crazy.