Decentralized exchange aggregator 1inch has successfully recovered most of the $5 million stolen in a recent exploit following negotiations with the hacker, who retained a portion of the funds as a bug bounty.
The exploit, which targeted the Fusion v1 smart contract, primarily affected resolvers—independent entities responsible for filling orders—using outdated implementations. Regular users’ funds were not impacted.
In response to the breach, 1inch and the affected resolver engaged in direct discussions with the hacker. The negotiations focused on a bug bounty arrangement, ultimately leading to the return of the majority of the stolen assets.
According to Decurity’s postmortem report, the attacker agreed to return the funds, minus the agreed-upon bounty, allowing 1inch to mitigate further losses.
Trend of Hackers Returning Funds in Crypto
The platform confirmed the recovery, stating that the situation had been effectively resolved. Despite this outcome, 1inch emphasized the importance of security upgrades, urging all resolvers to audit and update their contracts to prevent similar incidents.
“We’re actively working with affected resolvers to secure their systems. We urge all resolvers to audit and update their contracts immediately,” the company stated.
While this case was resolved through negotiations, not all crypto breaches have seen similar outcomes. Some past incidents have resulted in hackers voluntarily returning funds after accepting white-hat bounties, typically keeping around 10% as a reward.
However, major hacks, such as the $1.4 billion Bybit breach attributed to North Korean hackers, have demonstrated that recovery efforts are not always successful despite extensive community efforts.
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