Canada's first hacking DeFi trial has begun
An 18-year-old hacker bought a cryptocurrency at an undervalued price through an exploit
24.12.2021 - 10:15
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What’s new? In Canada, the representatives of Indexed Finance, a DeFi-based index fund, have filed a class action lawsuit against a hacker for stealing $15,8 million. A Canadian resident Andean Medjedovic, the alleged hacker, was served a warrant, but he did not appear at the hearing, CoinDesk reports.
What are the details of the hack? According to the lawsuit, Andean, 18, took out a flash loan from a bank, after which he hacked into Indexed Finance's protocols. He then made a series of transactions to buy digital assets at “artificially low prices.” According to the complainants, the hacker caused $15,8 million in damage to the company. A series of Twitter posts were revealed where the alleged criminal said that he would fight for the so-called “code is law” rule. Medjedovic became the first DeFi hacker to be actively pursued by law enforcement.
What does “code is law” mean? It is an unofficial motto in the DeFi community. “Code is law” implies that any actions technically permitted by smart contracts are not only immutable but also legally and ethically permissible. The DeFi sector is derisively referred to as “The Wild West” because of the complete lack of legal regulation.
How is the process developing? The victims have managed to get the stolen funds frozen. The Indexed Finance representatives Laurence Day and Dillon Kellar have stated that it was a simple fraud and they have already presented all the evidence to the court. Many lawyers argue that the "code is law" argument will not stand up to the trial.
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