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Uwu Lend, a DeFi protocol created by fraudster Michael Patryn, a.k.a “Sifu”, has been hacked for $19.4 million, according to the blockchain security firm Peckshield. Uwu Lend confirmed the exploit on Monday and said it would refund users “up to 80% of their original deposited amount.”
Also read: <a href="https://www.cryptopolitan.com/dmm-bitcoin-to-repay-users-after-300m-hack/" rel="noopener noreferrer nofollow">Crypto Exchange DMM Bitcoin Vows To Repay Users After $300M Hack</a>
Peckshield <a href="https://twitter.com/peckshield/status/1800176089316163831?t=sSTARHvGkT0vQ2qCH0AHUw&amp;s=19" rel="noopener noreferrer nofollow" target="_blank">reports</a> that the attack involved the use of ‘flash loans’, a type of loan that allows decentralized finance (DeFi) users to borrow crypto without collateral, but one that can also be manipulated. The Uwu Lend hacker targeted five stablecoin pairs to manipulate the price feed of sUSDe, and made off with nearly $20 million in USDC, FRAX, crvUSD and blUSD.
<h2 id="sifu-s-uwu-lend-to-reimburse-users">Sifu’s Uwu Lend to reimburse users</h2>
Sifu was removed from his role as treasurer of DeFi protocol Wonderland in February 2022 after he was <a href="https://www.cryptopolitan.com/wonderland-cfo-ex-convict-patryn-quadrigacx/" rel="noopener noreferrer nofollow">revealed</a> as Patryn, co-founder of the Canadian crypto exchange <a href="https://www.cryptopolitan.com/quadrigacx-begins-partial-compensation-for-creditors/" rel="noopener noreferrer nofollow">Quadriga CX</a>. The exchange lost $124 million of user funds in 2019. Sifu is also a former convict who did time for bank fraud in the U.S., but he was not accused of any wrongdoing at Wonderland.
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">
 Today's <a href="https://twitter.com/UwU_Lend?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow" target="_blank">@UwU_Lend</a> hack leads to $19.4m loss.
 The root cause is a price oracle issue. In particular, the sUSDe asset is priced as median from multiple sources. Five of them, i.e., FRAXUSDe, USDeUSDC, USDeDAI, USDecrvUSD, and GHOUSDe, were manipulated during the hack.
 The stolen… <a href="https://t.co/4ec92zxoql" rel="noopener noreferrer nofollow" target="_blank">https://t.co/4ec92zxoql</a> <a href="https://t.co/xuGGegfDpV" rel="noopener noreferrer nofollow" target="_blank">pic.twitter.com/xuGGegfDpV</a>
 — PeckShield Inc. (@peckshield) <a href="https://twitter.com/peckshield/status/1800176089316163831?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow" target="_blank">June 10, 2024</a>
</blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
Uwu Lend came out of leading lending protocol Aave, particularly its so-called v2 codebase, allowing users to borrow, lend and stake a variety of crypto assets. According to Peckshield, the stolen funds were converted to Ethereum (ETH) and transferred to two separate wallet addresses.
Uwu Lend said on X that it paused the protocol immediately after the exploit “while the team investigates the situation”. It <a href="https://x.com/UwU_Lendio/status/1800206381825564883?t=x-MBVeHyOfUQ_pEs2qVTxQ&amp;s=19" rel="noopener noreferrer nofollow" target="_blank">added</a>, “We are working with external networks to issue a reimbursement for affected victims during the process.”
The protocol said it would refund people “up to 80% of their original deposited amount”. Users will need to check their eligibility for a refund. Uwu Lend has also <a href="https://refund-usulend.com/" rel="noopener noreferrer nofollow" target="_blank">sent back</a> to users more than $5.3 million from lending pools that were not affected by the hack.
Also read. <a href="https://www.cryptopolitan.com/okx-user-loses-2-million-crypto-in-ai-hack/" rel="noopener noreferrer nofollow">OKX user loses $2 million crypto in AI hack</a>
The breach comes just a week after Japanese exchange <a href="https://www.cryptopolitan.com/dmm-bitcoin-300-million-btc-buyback/" rel="noopener noreferrer nofollow">DMM Bitcoin</a> lost over $305 million worth of cryptocurrency in an “unauthorized leak”. Recently, <a href="https://www.cryptopolitan.com/loopring-price-prediction/" rel="noopener noreferrer nofollow">Loopring</a>, the Ethereum layer 2 platform, lost $5 million in ETH to a hacker and crypto exchange Lykke was plundered for $19.5 million of BTC and ETH.
Cryptopolitan Reporting by Jeffrey Gogo

DeFi protocol founded by ‘Sifu’ hacked for $19.4 million

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