1inch hacker returns $5 million after negotiation

Decentralised exchange (DEX) aggregator 1inch (CRYPTO:1INCH) has recovered most of the $5 million stolen in a recent security breach after negotiating with the hacker, who retained a portion as a bug bounty.  

The exploit, which occurred on March 5, targeted an outdated version of 1inch’s Fusion v1 resolver smart contract. Investigators identified a vulnerability that allowed the attacker to execute unintended transactions.  

“After negotiations with the hacker, most of the $5 million stolen from 1inch has been returned, with the hacker keeping a portion as a bug bounty,” according to Decurity’s postmortem report.

The attack did not impact end users but affected a third-party market maker, TrustedVolumes.

Once the breach was detected, 1inch redeployed its resolver contracts to prevent further exploits.  

Following the incident, the hacker posted an on-chain message requesting a bug bounty in exchange for returning the stolen funds. TrustedVolumes entered negotiations, leading to the voluntary return of assets.  

This case reflects the increasing role of ethical hacking and white hat negotiations in the DeFi sector.

It also highlights the ongoing security challenges faced by DeFi platforms.  

This marks the second security breach for 1inch in six months. In October 2024, the platform suffered a front-end compromise due to a supply chain attack.  

The latest incident underscores the need for continuous smart contract audits and proactive security measures.

1inch has urged resolvers to upgrade to Fusion v2 and has reinforced its contract validation mechanisms.  

At the time of reporting, the 1inch price was $0.2129.