A group calling itself “Victims of the Ankr Exploit” has claimed that its members lost over 13,000 BNB coins in liquid staking (over $4 million at press time) as a result of the December 2 Ankr exploit, but have not been properly reimbursed by the Ankr company.. According to a group statement received on Jan. 19 by Cointelegraph, affected members claim they have only received half of the amount they lost. The group has asked Binance’s Chanpeng Zhao (aka “CZ”) to pressure Ankr to get the funds unlocked.
1/4 We, the victims of Ankr exploit, are increasing the reward from 100 BNB to 110 BNB (worth $28700 currently) for the person (including influencers and media) that:
✅ helps @cz_binance to understand the unfair compensation AND;
✅ makes @ankr to compensate us 100% https://t.co/sZlkqGW58a—Alex Soh (@AlexSoh14) January 7, 2023
The group specifically alleged that a redemption plan published by Ankr on December 20 has been unfair to liquidity providers on the Wombat exchange. According to this plan, Ankr proposed “partially covering the losses of stkBNB liquidity providers on Wombat”. Ankr argued that a full refund would be unfair because “the nature of the mixed liquidity pools” in Wombat made it difficult to determine how much liquidity providers had lost.
The group of victims of the Ankr exploit admitted that the protocol compensated them 50% of the BNB lost in the attack, but insisted that it should have compensated them 100%.
The group argued that Ankr has refused to fully compensate them because the lost stkBNB and BNBx liquid staked tokens were competitors to Ankr’s own ankrBNB tokens:
“It is evident that there is an unjustifiable segregation and discrimination of victims. And a fact that of X impacted protocols, only two of them (Stader and pSTAKE), direct competitors of Ankr, see their users discriminated against as victims.”
Citing a tweet from ZachXBT, they argued that Ankr has the ability to fully compensate them because He recovered 1,559 ETH (worth about $2.4 million at press time) from Huobi Global after the attacker tried to use it to sell the tokens.
The Ankr team responded to these accusations via an email sent to Cointelegraph on Jan. 25. In the email, the Ankr representative claimed that the redemption plan was “more than generous” to liquidity providers on Wombat. From the company’s perspective, much of the losses of stkBNB and BNBx on Wombat were due to poor risk management of these rival staking protocols and a lack of liquidity on Wombat, as they explained:
“50% of all BNBx and stkBNB liquid staking was done only on Wombat due to incentives from Stader and pStake. This represents an obvious concentration risk[…]Ankr cannot be held responsible for the lack of risk management of other pools. To put things in context, Ankr paid the Wombat pools in total 4 times more than the aBNBc TVL we had on Wombat, which is more than generous.”
The team further argued that critics of the plan do not understand the “flow of money” which led to the loss of funds, stating:
“We have to understand what happened and follow the money flow. The attacker sold aBNBc on Wombat against BNB and then BNBx and stkBNB. He then sold BNBx and stkBNB on other DEXs where there was more BNB liquidity[…]In this story, some people made money.”
The Ankr team also argued that it has not recovered enough funds to compensate users, stating that “Criminal investigations are ongoing to recover part of the funds, and the amount we believe we can recover is significantly less than what we paid.”
Ankr’s BNB staking protocol was hacked on December 2, 2022, and the attacker was able to obtain $5 million worth of cryptocurrency thanks to it. On December 21, the company announced that the attack had been carried out by a former employee. In the same announcement, it pledged to strengthen its security practices and to reimburse victims.
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