4 months after a significant safety breach, zkLend is shutting down and allocating $200,000 in remaining funds to compensate customers.
ZkLend, a decentralized money-market protocol constructed on StarkNet and backed by infamous hedge fund Three Arrows Capital, is shutting down operations 4 months after struggling an exploit that drained round $9.6 million in person funds.
In a June 25 publish, the zkLend staff acknowledged that the February 2025 hack had “deeply eroded person confidence” and that latest delistings of its token, ZEND, by a number of cryptocurrency exchanges, together with Bybit and KuCoin, additional “constrained token liquidity and accessibility.” The staff stated it will use the remaining $200,000 in its treasury to compensate customers reasonably than try a relaunch.
In February, zkLend provided the attacker a ten% white-hat bounty and promised to not take authorized motion if the remaining 3,300 ETH was returned by Feb. 14. The staff had warned that it will escalate the matter with legislation enforcement if the deadline handed with out a decision.
Hacker Will get Scammed
In April, the attacker contacted zkLend, claiming they’d misplaced many of the stolen funds after utilizing a faux Twister Money web site. In a message despatched via Etherscan on March 31, the hacker acknowledged that they’d mistakenly used a phishing web site and subsequently misplaced 2,930 ETH whereas making an attempt to switch the funds.
The closure announcement didn’t specify whether or not the staff nonetheless plans to pursue authorized motion in opposition to the hacker, however it talked about that the staff continues to work with the safety agency ZeroShadow to recuperate the stolen belongings.
The zkLend staff advised The Defiant that they’ve been collaborating with legislation enforcement and exchanges for the reason that exploit occurred. Concerning the hacker’s declare that they misplaced many of the stolen ETH to a phishing rip-off, the staff stated they “can’t rule out any risk of the Twister Money incident, and haven’t discovered any conclusive proof a technique or one other.”
“Regardless, we’ll proceed to work with ZeroShadow, and will there be any funds recouped within the course of, it is going to return to customers via the restoration portal, which continues to function after our closure,” they added.
ZkLend was launched with backing from Three Arrows Capital, StarkWare, and Delphi Digital. It raised $5 million in 2022 and had deliberate to supply each retail-facing and institutional lending providers via two merchandise, Artemis and Apollo.
