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$200M Mixin Network hack draws controversy

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0M Mixin Network hack draws controversy

Xiaodong Feng, Mixin’s founder, immediately outlined a compensation plan but would only reimburse up to 50% of users’ assets for now.

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Mixin Network, a Hong Kong-based decentralized cross-chain transfer protocol, is drawing controversy over the disclosure of a $200 million hack.

On Sept. 23, the database of Mixin’s cloud service provider was breached by hackers, resulting in the loss of $200 million in assets on its mainnet. Deposits and withdrawal services were immediately suspended on the protocol. However, developers said transfers would not be affected as the investigation continues.

In a post on Sept. 25, Zhuoer Jiang, CEO of Bitcoin mining pool BTC.TOP, claimed that Bitcoin (BTC) stored in the Mixin protocol “should have never been stolen in the first place.” Jiang said Mixin’s Bitcoin would typically have been “kept in cold storage” and remained unaffected by the cloud server hack compromising Mixin’s hot wallets. During its last monthly report in July, Mixin disclosed a total of 9,544 BTC, worth roughly $253 million, was stored in its protocol. 

During a live briefing on Sept. 25, Mixin founder Xiaodong Feng said Bitcoin was “the core asset” stolen and that developers would compensate users “up to a maximum of 50%” for the stolen assets. Feng said the remainder would be distributed to users as “tokenized liability claims” that Mixin would eventually repurchase “with its future profits.”

Founded in 2017, Mixin had nearly $400 million across 48 chains locked in its protocol before the incident, as per data provided by DefiLlama. The protocol allows users to send digital assets to other individuals via phone numbers. Xiaolai Li, a Chinese billionaire and early Bitcoin enthusiast, is one of the earliest angel investors in the firm. 

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