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After more than a year of the attack, BNB Chain Core has officially proposed a comprehensive plan to seize the collateral of the BNB Bridge exploiter and utilize the funds to repay outstanding debts without resorting to market liquidation of BNB.
The proposal outlined a detailed execution strategy to mitigate potential losses for the Venus protocol. The report noted that as of December 11, 2023, the exploiter’s balance comprises 630,240 BNB in supply. Alongside, it holds borrowings of 58,440,000 USDT and 37,440,000 USDC.
Per the information in the proposal, the outstanding debt must first be settled to unlock the BNB supply. As a result, the proposal suggests employing the forced liquidation mechanism by granting BNB Chain the authority to execute the necessary operations.
BNBChainCore published a proposal on the Venus forum which aims to give BNB Chain the discretion to seize the BNB Bridge exploiter’s collateral and repay its debts while avoiding any market liquidation of BNB. https://t.co/yC4RaLpKlx
— Wu Blockchain (@WuBlockchain) December 16, 2023
Notably, BNB Chain Core outlined five steps for executing the processes. The first is to enable forced liquidation for the exploiter’s position. In particular, this will liquidate 100% of its USDT and USDC positions. Subsequently, any remaining BNB post-liquidation will be seized.
Also, it was mentioned that the exploiter had accumulated 128,666.39 XVS tokens in emissions. In parallel, the proposal stated that the XVS token allocated to the account would be claimed, seized, and sent to the Venus treasury.
Additionally, the protocol liquidation fees generated during the process will be redeemed. Besides, if the remaining amount after settling the exploiter’s debt is adequate, it will be applied to cover any shortfall. However, if the remaining amount is insufficient to cover the total shortfall, Venus will utilize the risk fund.
This exploit relates to the security breach in October 2022. it prompted a temporary pause of the BNB Smart Chain (BSC), where the exporter generated $566 million in BNB, with only $137 million successfully moved to other chains. The perpetrator employed Venus, using 900,000 BNB as collateral to secure loans in different stablecoins, including USDT and USDC.
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