Mixin Network, a decentralized cross-chain transfer protocol based in Hong Kong, has become embroidered in controversy due to a disclosed hack that resulted in a loss of $200 million.
The security breach occurred on September 23 when the Mixin cloud service provider's database was compromised, leading to the loss of $200 million in mainnet assets. Following the breach, the protocol promptly suspended deposit and withdrawal services. However, transfers remain unaffected as the investigation into the incident continues.
Jiang Zhuoer, the CEO of the Bitcoin mining pool BTC.TOP, expressed on September 25 that the assets stored within the Mixin protocol "should never have been stolen in the first place." Jiang explained that Mixin's bitcoins are typically held in cold storage, which is not susceptible to the cloud server hacks that compromised Mixin's hot wallets. According to Mixin's last monthly report in July, the protocol disclosed that it held a total of 9,544 BTC, valued at approximately $253 million, within its system.
During a live conference on September 25, Mixin's founder, Feng Xiaodong, clarified that the stolen assets primarily consisted of Bitcoin, which is considered the "core asset." The developer has pledged to compensate users with "up to 50%" of the stolen assets. The remaining portion will be distributed to users in the form of "tokenized liability claims." Mixin intends to repurchase these claims "with its future profits," Feng stated.
Before the incident, Mixin, established in 2017, had nearly $400 million locked within its protocol across 48 different chains, according to data from DefiLlama. The protocol allows users to send digital assets to others using phone numbers, and it counts Chinese billionaire Li Xiaolai , an early Bitcoin enthusiast, as one of its initial angel investors.
