- SwissBorg lost around $41M in Solana after hackers exploited a flaw in staking partner Kiln’s API.
- The company has assured users their assets remain secure and promised reimbursement through its SOL reserves.
- SwissBorg is pursuing fund recovery with the help of security specialists and white hat hackers.
- Community reaction is divided, with some blaming SwissBorg for outsourcing risk, while others commended the swift and transparent response.
A Swiss asset management company has been hit by a significant exploit, with the firm reporting approximately $41 million USD ($62 million AUD) worth of Solana has been stolen.
The incident occurred yesterday when hackers targeted a vulnerability in one of the team’s staking partners’ API code.
The partner, Kiln, offers ‘enterprise-grade staking’ on several chains, although it predominantly services assets on Solana and Ethereum.
SwissBorg relied upon Kiln’s API to seamlessly connect its assets to the Solana DeFi ecosystem, powering strong yields for its AUM. However, this third-party involvement opened the door for hackers to manipulate the API and siphon funds initially intended for Solana’s protocol.
Related: Kinto Shuts Down After $1.55M Exploit Derails Recovery Efforts
Customers to be Reimbursed as SwissBorg Targets Hackers
While a hack in the tens of millions is no doubt a major blow for any company operating in the Web3 space, SwissBorg has maintained its operations are unaffected by the hack.
Notably, the team has already begun the process of reclaiming funds and ensuring customer assets are secure – reporting that assets held in both the SwissBorg app and Earn program are 100% healthy.
There are two primary levers the firm will pull. First, they will attempt to recover the stolen funds by employing security agencies and white hat (ethical) hackers.
Additionally, SwissBorg maintains a strong treasury of SOL as a contingency for events such as this hack, meaning that users who have been impacted will be compensated a vast majority of their funds as quickly as possible. At this stage, it appears that all customers affected will be fully reimbursed by treasury holdings alone.
SwissBorg Response Comes Under Fire
Despite SwissBorg moving quickly to douse the fires, some in the community have criticised the firm’s response.
In particular, customers on social media have lambasted the company’s attempt to ‘step blame’, by largely focussing on Kiln’s role in the incident. As one commentator suggests, SwissBorg employed Kiln’s API to assist with their staking processes, which means that, to some, the wealth management team is still ultimately responsible for the hack.
However, others praised SwissBorg’s quick response and transparent communication.
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