BNB Chain Core Unveils Plan to Recover Collateral, Settle Debts

The proposal outlines a five-stage plan, including forced liquidation and seizing residual BNB, along with reclaiming 128,666.39 XVS tokens.

BNB Chain Core Unveils Plan to Recover Collateral, Settle Debts
BNB Chain Core Unveils Plan to Recover Collateral, Settle Debts

BNB Chain Core has formally presented a comprehensive strategy to recover the collateral of the BNB Bridge exploiter and apply the proceeds towards repaying outstanding debts, all while avoiding market liquidation of BNB over a year following the attack.

The proposal provided a comprehensive strategy for implementing the Venus protocol to minimize potential losses.

As of December 11, 2023, the exploiter’s balance was recorded in the report as 630,240 BNB in supply. In addition, it maintains 37,440,000 USDC and 58,440,000 USDT in borrowings.

As per the information in the proposal, to access the BNB supply, the outstanding debt must be resolved.

Consequently, the proposal recommends that the compelled liquidation mechanism be implemented by delegating authority to BNB Chain to carry out the requisite operations.

Notably, the execution of the processes was delineated by BNB Chain Core in five stages. One approach is to facilitate the forced liquidation of the position being exploited.

Specifically, one hundred percent of its USDT and USDC positions will be liquidated. Any residual BNB following the liquidation process will subsequently be seized.

Additionally, the exploiter has reportedly amassed 128,666.39 XVS tokens through emissions. Conversely, the proposition stipulated that the XVS token assigned to the account would be subject to a claim, seizure, and transfer to the Venus treasury.

Furthermore, redemption will occur for the protocol liquidation fees generated throughout the process.

Additionally, should the amount remaining after the exploiter’s debt has been repaid in full, it will be utilized to compensate for any deficit.

Nevertheless, if the remaining sum fails to pay for the overall deficit adequately, Venus will employ the risk fund.

This exploit is associated with the October 2022 security vulnerability. The situation caused a brief suspension of the BNB Smart Chain (BSC), during which the exporter amassed $566 million in BNB but could only transfer $137 million to other chains.

Using 900,000 BNB as collateral to secure loans in various stablecoins, including USDT and USDC, the perpetrator utilized Venus.