Celsius Reportedly Affected in Exploit of DeFi Protocol BadgerDAO

key takeaways

Hackers stole $115 million from users of the bitcoin-focused Badger DAO on Wednesday
Like many crypto companies, Celsius is not FDIC insured nor a federally regulated bank

The Wednesday $115 million hack to the bitcoin-focused DeFi protocol BadgerDAO appears to have impacted Celsius Network to the tune of approximately $54 million, according to on-chain data from etherscan.

While the on-chain data does not definitively prove that the funds belonged to the crypto lender, the wallet that was impacted was seeded by a series of wallets that originates with Celsius.

Initial reports showed that a wallet linked to Celsius had 896 wrapped bitcoins stolen.

Celsius’ losses at this time could amount to approximately $54 million USD, a little under one-half of the total amount stolen from BadgerDAO.

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When Blockworks reached out to Celsius CEO Alex Mashinsky for comment on Thursday evening he said the company would provide a statement on Friday, but did not comment further.

On Friday, Celsius released a series of Tweets, addressing the hack. “No Celsius client and user assets were affected,” the company wrote.

BadgerDAO has hired data forensic experts Chainalysis to investigate the hack and is progressing with internal and external investigations, according to a recent tweet.

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“As of right now, we have nothing further to share outside of the recent post. We will continue to provide updates as they come available,” a BadgerDAO admin said to Blockworks Thursday night.

As Blockworks reported early Thursday, the hack on BadgerDAO didn’t appear to be an attack on the protocol itself. Instead, the hackers went after the web interface connecting the protocol to the users’ wallets.

Many BadgerDAO Discord users reported that when their wallets interacted with BadgerDAO, they were hit with requests for additional permissions and then transferred tokens to wallets controlled by the hackers, Blockworks reported.

As with many cryptocurrency companies, neither BadgerDAO nor Celsius are federally regulated banks or FDIC-insured.

It’s been a wild two weeks for Celsius. On Nov. 24, the company announced it had expanded its Series B From $400 million to an oversubscribed $750 million. On Nov. 29, the company suspended its Chief Financial Officer Yaron Shalem due to external fraud and sexual assault allegations.

This story was updated on Friday, Dec. 3, 2021, at 2:01 pm ET, to include the latest comments from Celsius on Twitter.

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