The Tapioca Foundation cryptocurrency project is currently in negotiations with a hacker who managed to steal $4.7 million through a social engineering attack. In an attempt to recover the stolen funds, the company is offering a reward of $1 million in Tether Stablecoin (USDT) to the hacker for the return of the remaining $3.7 million. This reward amount surpasses the typical 10% standard reward usually offered in such situations.
The attack took place on October 18, 2024, where the hacker made away with 591 Ethereum (ETH) and $2.8 million in USD Coin (USDC). This breach compromised the Tapioca DAO (TAP) and Stableco (SDO) stablecoin.
According to Tapioca Foundation, Matt Marino, the co-founder, disclosed the incident details on the corporate Discord channel. Marino explained that the other co-founder of the project, known as Rektora, fell victim to a phishing attack during an interview, allowing the attacker to gain access to smart contracts through malicious software.
To mitigate some of the losses, the Tapioca Foundation team returned 1000 ETH (approximately $2.7 million) by collaborating with the USDO stablecoin liquidity pool.
The hacker managed to withdraw around 30 million TAP tokens from the VSK contract during the attack, converting them to ETH valued at about $1.5 million. The funds were then exchanged to USDT and transferred to the BNB Chain network, where they currently reside.
The aftermath of the incident had a detrimental impact on the TAP token’s value, plummeting from $1.40 to 2 cents, as reported by Coingecko.