Even though the majority of funds stolen from KuCoin has now been invalidated, there are still some tokens with value. According to some sources, the hacker is dumping OCEAN through Uniswap. An interesting move, considering how Ocean Protocol will hard fork its contract to mitigate this issue.
Is Ocean Protocol Getting Dumped?
The question everyone has to ask themselves is how decentralized exchanges will act when funds are stolen from a CEX. As it turns out, Uniswap may have some work to do in this department. Although the platform updates its token lists regularly, blacklisting specific addresses – or ties to said addresses – is something to look into. After all, it is unlikely that centralized exchanges will stop getting hacked anytime soon.
Based on the Tweet below, it seems as if some OCEAN tokens are getting dumped on Uniswap. Not entirely surprising, as it has sufficient liquidity to be dumped into. At the same time, ocean Protocol confirmed it would hard fork its smart contract. Although this is meant to invalidate stolen tokens, the Kucoin hacker was seemingly quicker on the ball.
Looks like the KuCoin hacker started using Uniswap to swap from shitcoins to ETH. Started with OCEAN. AFAIK this is the first time Uniswap is used following a hack
1. From 0xeb….c23 to 0x1c…814 to 0x9e…E6b
2. 0x9e…E6b now slowly dumping OCEAN to ETH in 9 tx's https://t.co/BN5f1BN7V9
— Larry Cermak (@lawmaster) September 27, 2020
Granted, the thief is doing this rather cleverly. Sending small amounts of OCEAN through different addresses and them dumping it will not look too suspicious. Thankfully, there are people keeping very close tabs on what is going on exactly. If enough OCEAN is sold, the price of this token may collapse pretty quickly. Thankfully, only a 10% drop was triggered before Ocean Protocol paused its contract.
Looking at the Other Tokens
It is crucial to keep an eye on all other tokens the KuCoin hacker has obtained. What is happening to Ocean Protocol can affect other tokens in the future. Tether has frozen the funds, Orion Protocol invalidated the tokens, and several others have taken precautions as well. The question is whether Uniswap will play by these rules as well.
One thing to look out for is whether the “obtained” Ether will be blacklisted somehow. It will not be too difficult to do so, given all of the public evidence. At the same time, cashing out can be done through other solutions to potentially avoid detection.
It will be interesting to see what all of this means for decentralized exchanges. Kyber Network may become a target of stolen coin dumping if Uniswap liquidity dries up completely. A very unfortunate series of events that needs to be addressed somehow.
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