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Optimism (OP) loses 20 million tokens after sending them to the wrong address

by Thomas

This is a small but potentially costly mistake. The second-layer solution Optimism (OP) was supposed to send 20 million of its tokens to the organisation Wintermute, but Wintermute did not provide the right address. As a result, millions of OP tokens were sent to the wrong address, and are now in the hands of an unknown individual who has already started to transfer some of them via Tornado Cash.

Optimism misplaces 20 million OP tokens

Ethereum (ETH) layer 2 solution Optimism, which recently launched its first airdrop, had $15 million in OP tokens stolen due to a transaction error.

Optimism sent 20 million OP tokens (about $15 million) to the Wintermute organisation through the network’s dedicated partner fund two weeks ago, in particular to provide liquidity to exchanges.

However, the organisation transmitted its layer 1 address, and not the layer 2 address on which Optimism operates. As a result, 15 million dollars of OP tokens were transmitted… to the wrong address.

“In communicating the wallet address to the Optimism team, we made a serious mistake. We had a Gnosis Safe multisig wallet deployed on the mainnet for some time and due to an internal error, we communicated the same wallet for the receiving address. “

Sequence of events

When the Wintermute team discovered the error on 30 May, they claimed that the funds, although on the wrong address, remained safe because they were inaccessible. However, someone seems to have managed to get hold of the tokens, as they have been moved to another address.

As stated in the official Wintermute press release, the individual has already sold a million of them at the time of writing

Unfortunately, an attacker was able to deploy the multisig on layer 2 with different initialization settings before the recovery operation was complete and took control of the 20 million OP tokens. This address has since sold 1 million tokens, and can easily sell the rest. “

The thief sent the tokens to Ethereum, before transferring them to another wallet address via Tornado Cash, a common practice in hacks to erase transaction records to make the funds untraceable.

Wintermute has however fully admitted its mistake, and has committed to refunding every token that is sold from this address. This has already been done for the 1 million OPs already resold.

Beyond the possibility of reselling the 20 million tokens, the attacker could also make massive use of the tokens to influence the governance votes of the decentralised autonomous organisation (DAO). A scenario that has not yet occurred, but which remains under the watchful eye of Optimism’s teams.

The attacker still has a week to return the funds

In its statement, Wintermute mentions the possibility that the attacker is possibly a white hat and will eventually give back the 19 million tokens still stored on the original address. However, according to them, this is not the most likely route, especially as their message to the hacker went unanswered.

The team in charge of the project sent a message to the attacker via its official press release, mentioning in particular the possibility of collaboration:

“The way the project is being run is to have the hacker’s name on the website.

“The way the attack was carried out is quite impressive and we may even consider consultation or other forms of cooperation in the future. “

However, it would appear that it is double or nothing for the attacker, with Wintermute indicating that if necessary, the necessary steps will be taken to harm him:

” You have one week to consider becoming a white hat. In the event that the above does not happen, we are 100% committed to returning all funds, tracking down the person(s) responsible for the exploit, doxxing them [revealing their identity publicly] completely and delivering them to the relevant legal system. Consider your options and choose to be good and optimistic instead of living in fear. “

Until then, Optimism has returned 20 million new OP tokens to Wintermute, so as not to jeopardise initial plans to provide liquidity to exchanges offering the OP token.

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