The Tapioca Foundation has offered a $1 million bounty to the hacker responsible for stealing $4.7 million in a DeFi breach. The foundation describes the attack as a “social engineering attack “ that directly targeted the protocol and resulted in significant financial losses.
In an on-chain message sent to the attacker on October 20, Tapioca extended a bounty offer of $1 million in Tether (USDT). The message stated, “We would like to extend an enticing bounty settlement, enabling you to keep funds that are entirely legally yours, without any conditions.” This offer exceeds the standard 10% bounty, as the foundation is trying to reclaim the remaining $3.7 million in stolen funds.
The Attack Explained
The hack was first revealed in an October 18 X post from Tapioca, which stated the protocol had suffered a social engineering attack. The attacker made off with 591 Ether (ETH), valued at approximately $2.7 million, and around $2.8 million in USD Coin (USDC).
According to Tapioca, the hacker compromised the vesting contract for the Tapioca DAO Token (TAP) and the USDO stablecoin, allowing the theft. The attacker was able to sell vested TAP and exploit the system to create unlimited USDO, depleting a liquidity pool.
In a message on Discord, Tapioca co-founder Matt Marino revealed that another co-founder, pseudonymously known as Rektora, fell victim to phishing during an interview process. Marino explained that the phishing attack replaced a legitimate transaction with a malicious one, giving the hacker access to the compromised contracts.
Recovering Part of the Stolen Funds
Despite the breach, Marino later announced in an October 19 Discord post that the foundation had “hacked the hacker,” successfully recovering 1,000 ETH, valued at over $2.7 million. This collateral, which was backing the USDO stablecoin, provided some relief, though the overall damage remains significant.
TAP Token Takes a Major Hit
The attack had a devastating impact on the value of the TAP token. According to CoinGecko, TAP plummeted from $1.40 to just 2 cents following the breach, reflecting the gravity of the situation. The attacker withdrew nearly 30 million TAP tokens from the vesting contract and converted them into USDT before transferring the stolen funds to the BNB Chain.
As of now, Tapioca is awaiting a response from the attacker regarding their bounty offer.
I am Toby Rothschild, Co-Founder of Spearmint and author at Coinography, and a strategist focused on advancing Web3 innovation, digital ecosystems, and the future of decentralized technology. I combine product thinking, creative leadership, and deep interest in emerging trends to help shape how individuals and organizations interact with the next generation of digital systems.
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