War & Peace: Behind the Scenes of Euler’s $240M Exploit Recovery


  • In March 2023, the Euler Protocol was exploited for ~$197 million in assets.
  • Over the course of the following three weeks, the Euler Labs team engaged in a highly strategic recovery effort that led to the return of ~$240 million in the stolen assets.
  • During the operation, multiple twists and turns threatened to throw things off course. These included the intervention of the notorious Lazarus Group, multiple red herrings, an unpredictable attacker and frontrunning bots.
  • The team that pulled off this exceptional feat is the same Euler Labs team that has been hard at work over the past year building a stronger, more powerful and modular V2 of the Euler platform which we’re excited to help rollout over the coming weeks and months.


As we enter 2024, I want to give you an update on what the Euler Labs team has been up to. While 2023 was not the year we had hoped for, we are more bullish than ever that 2024 will be a huge year for DeFi, and Euler especially. The brand refresh being unveiled today is just the beginning of a series of announcements we have planned over the coming months. The Euler team has been working on some transformative projects that will bring us ever closer to our mission of creating a truly modular DeFi trading ecosystem. But before we talk about the future let’s reflect on the series of events that took place this past year.

2023 — A look back

There’s no other way to put this: 2023 was a bit of a shit year.

I can’t think of a better way to say goodbye to it than by telling the story of how it played out. The tale starts very positively, for me at least, with the birth of my son, but then very quickly takes a dark turn with a devastating $200M attack on the Euler protocol and its users, before picking back up with an unprecedented $240M recovery story. So strap in for a tale of babies, bank runs, exploits, MEV bots, sleuthing, trolling, counter hacks, North Korea, negotiations, heart attacks, Laurence Day, recoveries, and much more.

It is my hope that by telling the story of the Euler exploit we can set the record straight and move onto the next chapter of the Euler story. As with many big news cycles, there was a lot of misinformation published and an endless amount of innuendo and rumours on social media. We enforced a communication blackout as part of our recovery strategy, which turned out to be essential for the recovery itself, but allowed external observers to have a field day speculating on how the recovery came about. Right now whenever we talk about Euler, people always want to look backwards — I want to put an end to that this year and get people excited about Euler’s future.

The most important part of this story is that Euler users’ assets were fully recovered and that the Euler community ultimately came out on top. The how and why will be interesting to some, perhaps insightful to others. Considering the complexities of crypto, the fact that we were dealing with what turned out to be an irrational bad actor(s), and interference from one of the world’s most ruthless hacking teams, this is a remarkable outcome.

I also want to make sure the people on our team and the broader investigation get credit for the monumental effort they put into the recovery. On one of our company all-hands calls shortly after the attack I told everyone I would help them get new jobs, to which one person replied: “I’m not going anywhere until we find him”. That attitude really sums up how our entire team responded to this incident. Our team really gave everything to the recovery effort, and we simply wouldn’t have seen the outcome we achieved without this extraordinary commitment. We’re a stronger, more resilient team today than we were in March 2023. Not only have we retained almost everyone that was with us a year ago, we’ve added top talent that have been drawn to Euler Labs because they believe in our potential to build great software.

Finally, it’s also just an objectively interesting story that I think deserves to be told. I can’t tell the story in its entirety for a variety of reasons. Not least because I have no intention of revealing the techniques we used to bring about the recovery. But the twists and turns and human elements are far more interesting than the technical details anyway.

I also want to emphasise that a lot of people were impacted by the events of 2023 and their stories are just as important as mine, but ultimately not mine to tell. This is my story as I experienced it. I’m going to tell it from a first-person perspective in chronological order because I can’t think of a better way to do it. I’ve generally avoided mentioning anyone else by name to protect people’s identities, but those people who helped in this case know who they are and have my eternal gratitude.

Ok, let’s dig in.

Euler in the beginning

I am one of three co-founders of a project called Euler, which started in the midst of the pandemic back in 2020. Back then, my co-founders and I started Euler with the goal to develop a decentralised finance (DeFi) protocol that would allow people to lend/borrow a wide variety of crypto assets directly from/to one another in an open, non-custodial manner.

Before starting the project I worked as an interdisciplinary research scientist at the University of Oxford, where I used to build game-theoretic mathematical and computational models of populations of organisms cooperating or competing with one another. I worked on topics as wide ranging as the evolution of cancer, antibiotic resistant evolution in bacteria, and the spread of invasive Hornet species. This might sound like a world away from DeFi, but the underlying game-theoretic principles are really not that dissimilar. That’s ultimately what attracted me to the DeFi movement that was starting to really take off in late 2019. I realised that many of the tried and tested mathematical techniques I was using in my day job could be applied to a brand new discipline.

My co-founders and I initially tried to differentiate Euler from market leaders like Compound and Aave with novel mechanisms around how interest rates could be set in a decentralised manner. We also designed the protocol to compose tightly with decentralised exchanges like Uniswap in order to offer users access to more lending markets than ever before. Over time, however, we ended up introducing a range of new innovations to the DeFi lending space, many of which focused on new ways of quantifying and managing risk. This helped the project to find admirers, especially among the DeFi developer community.

As the team and project grew, we also gained a reputation for taking security seriously. We weren’t building fast and breaking things as some others were boasting about doing at the time. We didn’t want the project to be a flash in the pan. We developed the protocol slowly and methodically, even as the wider crypto market was taking off and many other projects rushed to launch.

To reinforce our security-first approach, we had the protocol audited at great expense many more times than is the industry standard. Our audits invariably came back with excellent feedback from auditors. We had the UI audited. We put in place a $1M bug bounty for anyone who found critical bugs in Euler, higher than anything offered by other leaders in the space. We secured $10M insurance cover for the protocol by forging a partnership with a DeFi insurance firm (extremely rare in DeFi). Overall, we tried to go above and beyond the industry norms when it came to security wherever possible.

Following deployment in Dec 2021, the protocol continued to grow in popularity. Even as the broader market was cooling due to the collapse of Luna, Celsius, FTX and others, Euler continued to find new users and grow its market share. And its enhanced liquidation module had been proven a success, lowering the cost of liquidations for borrowers more than 10x in some cases. Owing to its gas-efficient design and risk management features, it was also particularly popular with other decentralised organisations (DAOs) seeking to deposit treasury assets. Some of its biggest users resulted from integrations with other protocols like Angle, Balancer, and Idle.

Going into 2023 things looked very positive for Euler. It had been live on chain for over a year and had survived unprecedented and hostile market conditions for much of its existence, growing where others were wavering, pushing on where others were slowing down. That is until March 13th 2023, when things changed dramatically.

March 9th

Babies and bank runs
In the first few months of 2023 there was a sense of cautious optimism in the crypto industry. Most of the bad actors had been washed out the year prior. Green shoots of recovery were seemingly on the horizon. At Euler, we had been hard at work developing the core of what will soon become the next iteration of the Euler platform, what we’re currently calling “Euler V2.”

I was also waiting for the birth of my second child, who was due in early March. On Thursday March 9th, close to midnight, he arrived. My wife and I spent the next day with him and I told my team to expect me to be off on paternity leave for a couple of weeks. Everything was seemingly perfect, but as we all know, this didn’t last.

Outside of crypto, the wider global economy had been faltering and inflation was soaring. Interest rates had risen faster than at any time in history and many banks in the US were caught short. A lot of those struggling were holding US treasuries that were rapidly decreasing in value and lenders started to worry they might not be able to satisfy short-term requests for withdrawals. Silicon Valley Bank was the first domino to fall.

One might think that a bank run on a fairly small bank in the US would have had a limited impact on crypto markets, but that wasn’t the case. One of the largest tokens by market capitalisation is a USD denominated stablecoin called USDC, which gives users digital dollars to use on chain. USDC should ordinarily be redeemable for exactly $1, because it is matched 1:1 with USD bank deposits, but hours after my son was born the bank run started to threaten its backing and it began to de-peg from $1 and trade lower as redemptions stalled.

The problem for Euler was twofold: First, the Euler DAO had a treasury holding more than $25m in USDC. Second, the Euler protocol had many millions in USDC used as collateral for loans. If USDC went to zero, it could send the treasury to zero and cause problems for protocol users along with it.

With my son less than 24 hours old, I had to get to work. I spent the whole weekend making calls to other teams, banks, investors, and others, trying to map out what, if anything, could be done. It felt like Euler could be in real trouble.

Fortunately, as quickly as the drama started, it went away. By late Sunday night, U.S. banking regulators had taken extraordinary measures to shore up deposits in the impacted banks. Likewise, over the next days and weeks international regulators took steps to provide additional liquidity and oversight to their own shaky depository institutions. All that worry for nothing it seemed. I went to bed exhausted, but looking forward to spending more time with my son on Monday.

March 13th

Euler exploited
The next morning, on March 13th, during our usual breakfast routine, I could hear something ringing upstairs in my office. I rushed up to see what all the noise was about, expecting it to be something related to the bank run, but it was much much worse. Messages were coming from all directions telling me something unusual was happening with the Euler protocol. An attack was ongoing and tens of millions of dollars appeared to have already been drained. I jumped on a call with other members of our team as we tried to figure out what was actually happening.

Of all the times for this to happen as well, it seemed so cruel. The ups and downs of the previous days gushed over me and I knew that things would likely get worse before they got better. Unfortunately there was no time to grieve for the situation though. As the adrenalin kicked in I got to work with my team. There was so much to do.

WTF is the donateToReserves function?

One of the first tasks was figuring out exactly how the attack was carried out. Fortunately this was done exceptionally quickly because the entirety of the Ethereum security community had been digging through the rubble of the exploit within minutes of it being detected. The cause was identified as a single missing line of code in an obscure code path involving the now famous ‘donateToReserves’ function inside of Euler.

To understand how the attack worked, it’s important to understand the purpose of the donateToReserves function in the first place. People looking into the details of this function noticed that it was not present in the initial Euler code base when it was deployed back in 2021.

So where did it come from? Why would you ever want to donate your own assets to the protocol’s reserves? Unfortunately some people rushed to speculate about this on social media. Rumours were soon spread that donateToReserves was unaudited code introduced for vanity purposes. This was simply not true at all. The code was introduced for an important reason, and most definitely audited. Some people were even saying that the Euler developers had introduced the function deliberately as a back door to drain the protocol themselves — insinuating that we were about to go on the run! There was a lot of noise to filter out in those first few hours.

The truth is that donateToReserves was introduced in order to fix a much smaller ‘first depositor’ bug in the protocol that had been missed by all previous auditors of Euler. That bug was eventually reported by a white hat hacker (ethical hacker) as part of the Euler bug bounty program via Immunefi almost a year prior to the 2023 attack. The white hat had identified in their submission that the original version of the Euler protocol was vulnerable to allowing first depositors in new, uninitialised pools to have their deposits stolen by a front-runner. The reason they highlighted was that an internal exchange rate in the protocol was not properly initialised when there were no pre-existing depositors, allowing would-be front-runners to set it arbitrarily.

At the time the bug bounty submission came in for the first depositor bug it had not been spotted by prior auditors or been exploited. Had it been exploited, it would have likely led to minimal losses and would very likely have been covered by the $10M insurance programme Euler had in place. Nevertheless, bugs that permit theft of assets, no matter how small, need to be mitigated. So a plan was put in place to make sure it was patched. That patch created the vector for the March 2023 exploit.

The proposed solution was developed and sent to the auditors for review. That solution would work for all new markets activated after the patch, but for a subset of pre-existing it would not. So a new function — donateToReserves — was included to make sure that the internal exchange rate of those pre-existing markets could be addressed too.

The solution was sent to audit by the most recent auditor of Euler. That auditor was also the protocol’s insurer, with a $10M insurance payout potentially on the line if anything went wrong. So they were strongly incentivised to get it right. On completion of the audit, an upgrade to the smart contracts was proposed to the Euler DAO community, and by July 2022 the first depositor bug was patched.

Unfortunately there was a critical issue with the introduction of donateToReserves that no one spotted at the time (or for a prolonged period after). Specifically, the function lacked a health check to make sure that an existing user wouldn’t be able to put themselves in an unhealthy state just by donating to the reserves. Clearly this is something that an ordinary user should never want to do, so in retrospect it’s not hard to see how it was missed at the time.

Ultimately, the attacker exploited the missing health check in this function to instead donate a large amount of their own collateral to the reserves in order to make themselves eligible for liquidation. They then self-liquidated themselves to claim a liquidation bonus that was greater than the losses caused by the donation.

First clues left by the attacker

When something like this happens in the crypto industry, the worst case scenario is that it is perpetrated by organised crime or a state-sponsored actor, because then there’s very little hope of recovery, regardless of how good the investigation into what happened is. But if the attack is carried out by an individual or is opportunistic in nature, there is a much better chance of finding out who did it and getting some or all of the stolen assets back.

Fortunately for Euler users, there were early signs that this attack was not carried out by an experienced black hat hacker. There was a sliver of hope. There is a small sub-group of security specialists, sleuths, and white hat hackers within the Ethereum community that will often offer to help projects in such circumstances, and they were the first to notice something rather strange about the way the exploit had been carried out. We were hugely appreciative for their support in the immediate aftermath of the exploit and for their continued and dedicated support in the weeks that followed.

Most exploits begin with the withdrawal of funds to a privacy-preserving protocol like Tornado Cash (a protocol which provides users with a greater degree of anonymity than they would normally expect to have from transacting on Ethereum, which is ultimately a public ledger). The withdrawn funds, whose origins are then hard to trace, are then used to pay for deployment of exploit code and exploit transactions. Most exploits will take place in a single clean transaction very soon after the code encoding the exploit logic has been deployed on chain. However, in the case of the Euler exploit, the first few transactions were anything but clean.

The exploit in real-time

Note that hereafter sections involving communications and transfers are often told in present tense rather than past for clarity and ease of understanding.

  • At 8:50:23 am UTC the attacker uses an address labelled as Euler Finance Exploiter 1 to deploy the exploit smart contract (labelled as Euler Exploit Contract 2) to Ethereum. This contains the logic for the theft of assets from Euler, but does not actually steal anything itself unless the attacker carries out further transactions using it. Note that the labelling of the exploit smart contract by Etherscan is a little confusing here (why 2 and not 1?). This will become clear in a moment.
  • We would normally expect an attacker to start using their exploit smart contract very soon after they have deployed it to carry out the attack itself, but that is not what happens here. Instead, at 8:50:35 am UTC, just seconds after the first exploit smart contract is deployed, a second copy of the exact same smart contract is deployed (labelled as Euler Exploit Contract 1) by another address labelled as Euler Finance Exploiter 3.
  • Shortly after, at 8:50:59 am UTC, Euler Finance Exploiter 3 carries out the first exploit: a single transaction which steals around ~$8.8M worth of assets from the protocol. Then they halt their attack and go strangely quiet.
  • At 8:56:35 am UTC Euler Finance Exploiter 1 picks up where Euler Finance Exploiter 3 left off, triggering several more exploit transactions over a period of around 15 minutes. They then convert most of their stolen assets to ETH and DAI and withdraw the majority to a second attacker-controlled address, labelled as Euler Finance Exploiter 2.
  • At 10:33 am UTC, Euler Finance Exploiter 2 then sends 100 ETH to yet another attacker-controlled address, labelled as Euler Finance Exploiter 4.
  • At 10:38 am UTC Euler Finance Exploiter 1 then sends 100 ETH onwards to Tornado Cash. This was considered to be bad news, because anyone sending funds to a privacy-preserving protocol probably does not have plans to return them.

Immediately after the attack, the balances controlled by the four main addresses involved are:

The main attacker has also transferred ~$168k worth of ETH (100 ETH) from Euler Finance Exploiter 4 to Tornado Cash.

In total, stolen assets are worth ~$197M at the time of the attack, with several thousand affected users. Among the largest impacted users are other DAOs. Angle protocol, in particular, is severely hit, with ~$17M in losses. Those losses lead its over-collateralized stable coin to de-peg, threatening the viability of the entire protocol. Also impacted are protocols like Balancer, Idle, Yield, and many more. The number of other protocols with deposits in Euler really highlights its composability and just how much it was trusted by the wider developer community at the time.

Over the next few weeks, with the price of ETH rising during the negotiation period, the attacker eventually returns ~$240M worth of assets to Euler users. Some affected users even joke on social media that the attacker is a better trader than they are. It’s hard to overstate just how special an outcome this is for the Euler community. For users to come out ahead after an attack like this would be an outcome very few would expect — but they did.

Before we get there though, there’s a lot to cover in between.

Attacker gets front-run by a bot

Overall, the attack is a bit of a mess. What on earth happened here? Euler Finance Exploiter 1 is the first to deploy the exploit smart contract, but second to steal the funds. Euler Finance Exploiter 3 is second to deploy the exploit smart contract, but the first to steal funds. Digging into the details, we see that Euler Finance Exploiter 1 and Euler Finance Exploiter 3 both paid for the exploit to be carried out using different sources of funds.

Euler Finance Exploiter 1 is funded by Tornado Cash. They are clearly the developer of the exploit smart contract, but it is difficult to trace the source of their funds back any further than that because of the privacy-preserving nature of Tornado Cash.

Euler Finance Exploiter 3 is funded by a mixture of two other protocols, called FixedFloat and Multichain, respectively. Interestingly, the source of their funds can be traced back a little further, all the way back to an exploit of another protocol just 30 days prior.

So, is there a single exploiter or two? If there is a single exploiter, did they make a mistake and accidentally deploy their exploit smart contract twice, leaving clues as to their identity?

At 11:38:11 am UTC the Euler Finance Exploiter 3 withdraws ~$8.8m worth of DAI back to Euler Finance Exploiter 1. This might make it seem like Euler Finance Exploiter 1 and Euler Finance Exploiter 3 are one and the same, which could be good news for identifying the attacker because of the traceability of the source of funds for Euler Finance Exploiter 3.

Unfortunately, however, at 12:08:35 pm UTC a message from Euler Finance Exploiter 3 is sent on chain which gives further details about what happened. They claim that the two attackers are unrelated parties after all. It reads:

Hi, I am the owner of a MEV bot that has accidentally frontrun the first tx of the hacker. It tried to frontrun the second tx but failed and only the contract has been created. I tried to return the money but the contract can only send to an address already in bytecode. Unfotunately it sent the money to the hacker’s address. I tried my best and I am very sorry for anyone who lost money.

The claim here is that Euler Finance Exploiter 3 did not mean to steal the first batch of funds. How is this possible? If not, why did they send funds to the hacker and not back to the protocol?

For those that aren’t aware, transactions on Ethereum are often made semi-public before they are processed by network validators for inclusion on the blockchain. This gives rise to opportunities for other users to extract value from them (so called ‘maximum/miner extractable value’ or MEV for short). Most forms of MEV involve some kind of front-running. A classic example is a sandwich attack, in which an MEV searcher places an order right before and after a trade on a decentralised exchange protocol takes place. This allows them to front and back-run the transaction to make profit. A related type of profiteering happens in traditional finance via high-frequency trading (HFT).

Front-running is not just possible for exchange transactions though. Sophisticated MEV searchers will take any transaction they get advance notice of, rapidly simulate it, and if it makes a profit, try to copy it for themselves. In the case of the Euler exploit, the claim by Euler Finance Exploiter 3 is that their bot saw a very profitable transaction ahead of time and simply copied it, front-running the attack from Euler Finance Exploiter 1 on Euler.

Why then did Euler Finance Exploiter 3 send the stolen assets back to Euler Finance Exploiter 2 if they had no intention to steal anything? Decompilation of the exploit smart contract from bytecode back to human-readable code showed that the code they copied had a withdraw function that pointed back to Euler Finance Exploiter 2. So it was simply not possible for Euler Finance Exploiter 3 to do anything but send the assets back to the main exploiter, even if a smart contract deployed by their own address held them for a short period of time.

Did the MEV front-runner help? In many ways, clearly not. Their intervention led to a lot of wasted time by investigators trying to figure out the relationship between all the addresses involved that ultimately could have been better spent focussing on the main exploiter.

However, the front-running did help reveal some information about the main exploiter. In particular, it confirmed to us that this was unlikely to be a sophisticated state-sponsored actor or organised crime group. Why? Because, if it had been, the attack would have been orchestrated in a much cleaner way. There are techniques more sophisticated users can use to prevent front-running.

Information gathering

In the aftermath of an attack there is an enormous amount of information that needs to be gathered. Our team quickly organised around this task and started the painstaking process of identifying potential leads. To use a cliché, no stone was left unturned.

The amount of data we had to work with would take weeks to sift through and it was a largely manual task. The search would throw up countless leads and red herrings. The world of crypto is still small, and everyone is connected to everyone else if you look hard enough. And believe me, our team couldn’t have looked harder.

In conjunction with the decompiled smart contracts, analysis of the content and style of the exploit code logic, and some other tricks we had up our sleeves from information gathering, we were able to formulate a list of leads early on and figure out what kind of attacker we were likely working with.

Communications begin

As is normal after any exploit, we tried to reach out to the attacker the very same day with an on chain message. Our opening gambit to the attacker was simple and neutral in tone:

We understand that you are responsible for this morning’s attack on the Euler platform. We are writing to see whether you would be open to speaking with us about any potential next steps.

Ultimately there is a low probability that an attacker will respond to any message, regardless of what it says. However, it is obviously important to try to say something as a way to break the ice. Until sufficient evidence has been gathered to the contrary, it is always important to leave the door open to the (very) remote possibility that an attacker might be able to provide an explanation for what has happened. They might be open to exiting the situation as a white hat.

We were not particularly hopeful though. There were already several strong indications that this attacker was not likely to be open to negotiating in good faith. First, they had already converted most of the stolen assets into ETH and DAI. This incurred huge losses in slippage costs and is not something someone would normally do if they intended to exit as a white hat. Second, the attacker had already transferred 100 ETH to Tornado Cash within an hour or so of the attack. Given that they were already laundering stolen assets through a US-sanctioned protocol, it seemed unlikely that they would be open to negotiating in good-faith.

Normally the people handling exploit communications will start with a more deferential tone than the one we took. Something that tries to paint the attacker in a positive light. It might even say ‘congratulations’ to them for finding the vulnerability or highlight their skill. I don’t know why that approach has become the industry norm, but, for good reasons, including those stated above, it was not the approach taken here.

Ultimately, there is very little evidence that taking a deferential tone in negotiations actually works. If an attacker is not already minded to return assets voluntarily, they are unlikely to be persuaded of this by an overly-friendly message. In general, pretending to be nice to someone who has clearly harmed you is more likely to make you look weak and perhaps even comes across as patronising/infantilising.

In the meantime, we also enforced a company-wide blackout on social media communications except for a handful of carefully crafted and very deliberate Twitter updates. This went against industry trends, where the people dealing with the fallout of an exploit will often spend time on social media answering questions and trying to bring clarity to the situation. This is a completely reasonable and appropriate approach in many circumstances.

However, it wasn’t appropriate in our case because we had already gathered enough information about the attacker to know that there was a good chance that they might be anxious about what they had done. Anxiety is generally a feeling that you reduce by getting information that helps you collapse the vast state of uncertainty in front of you to something more contained and manageable. Even something as simple as a reply to an unrelated social media message can help collapse uncertainty and leak information. Limiting communication helped maintain maximum uncertainty in the attacker’s mind by starving them of information.

Our communications approach was quite different to how people have tended to handle exploit communications in the past and was initially criticised by a lot of people. Since we could not discuss our communications strategy at the time, it is my hope that this post goes some way to making it clear that the communications choices we made throughout the whole process were extremely strategic, almost obsessively so.

Laurence Day shows up

Late into the evening my wife and I had a visit.

Laurence Day is a crypto Twitter micro celebrity who gets accused of being behind every and all hacks in crypto as part of a longstanding joke. The reason for this is because he was a core contributor to another protocol that was exploited, and when the international media first wrote the story up about it they accidentally put a picture of his face next to the sub-heading ‘exploiter’, which then inevitably got copied far and wide. And so he became ‘the exploiter’ of his own protocol and pretty much everything else after that.

I didn’t know him all too well before this event, but as luck would have it he lives quite close to me and he had a newborn himself arrive just a few weeks before my son. I was on a lengthy call discussing the case when Laurence arrived and so I left him downstairs talking to my wife. After everything that had happened that day I can only imagine what she made of his appearance.

Laurence wasn’t the only person to show such kindness in the aftermath. Ethereum is an amazing community and we really felt that in the days and weeks that followed. Many people reached out to offer their support. Another person I’d never met, but who’d been through something similar, reached out just to talk about how I was feeling and see if they could offer some emotional support. That really helped me process things mentally.

March 14th

Reward for information launched

Unsurprisingly, no response was received to our first message. So the next day, on March 14th, we decided to take a more direct approach. We made a recommendation to the Euler Foundation to urgently launch a reward for information that might lead to an arrest and a return of all funds. Shortly after a new message was sent on chain:

Following up on our message from yesterday. If 90% of the funds are not returned within 24 hours, tomorrow we will launch a $1M reward for information that leads to your arrest and the return of all funds.

Beyond actually getting information from a whistleblower or motivated sleuth, the goal here was to increase pressure on the attacker, to maintain their state of anxiety, and perhaps provoke a response from their side in order to gain further information about who they were.

Whilst a reward for information is not common in the industry, and some people felt that it was too soon and/or too aggressive from our side to be taking an approach like this, it was a strategic move that we felt we needed to make early to keep the attacker on edge.

Later we will learn from private communications with the attacker that this approach had worked better than we had ever imagined possible, but given what happened next, we wouldn’t know it at the time.

March 15th

A final message
Before the 24-hour deadline was up, we followed up with what we expected would be a final message that gave the attacker a final chance to work towards a more positive resolution:

The simplest way to move forward today is to return 90% of both the DAI and ETH under your control to the EulerDAO treasury address: 0xcAD001c30E96765aC90307669d578219D4fb1DCe. Then investigations can be halted, and the focus here can turn to distribution of that back to protocol users, without needing to go the legal route.

Here we wanted to give just enough of a hint that we had already gathered information to go the legal route whilst still offering an olive branch to achieve a swift resolution.

Community messages

We were not the only people sending messages to the attacker in the early days after the attack. Many other affected Euler users had been sending their own messages on chain pleading with the attacker to reverse their actions. One message that plays an important role in the story read:

“Please consider returning 90%/80%. I’m just a user that only had 78 wstETH as my life savings deposited into Euler, I’m not whale or millionaire. You can’t imagine the mess I’m into right now, completely destroyed. I’m pretty sure 20M is already life changing for you and you’ll bring back joy to a lot of affected people.”

Among the sad messages like this one there were also people messaging the attacker offering them tips on how to launder the proceeds of the attack (pretty common after exploits), as well as plenty of people just trying to bring a bit of humour to the situation (also pretty common).

Whilst probably quite hard to understand for people outside the industry, the gallows humour that follows these kinds of bad events in crypto is a key part of what binds the broader community together. It’s a nascent industry, bad things happen and so people build resilience through humour. It’s one of my favourite aspects of the culture. Anyway, one message that was sent to the attacker that got a few laughs on social media purported to be from the aforementioned Laurence Day:

March 16th

More Tornado Cash transfers

At 1:19 am UTC on March 16th we finally seem to get a response to our messages, and it is not good. The attacker transfers another 2500 ETH to Euler Finance Exploiter 4, and then transfers another 1000 ETH of this into Tornado cash. This doesn’t look like behaviour consistent with someone planning to imminently negotiate a return of funds. Although it isn’t all the ETH, which gives us some hope.

There’s something odd about the way the attacker is working here though — the transfers are all in batches of 100 ETH. There is no reason to send ETH around in batches like this. Sleuths assisting the investigation and a number of people on social media picked up on this unusual behaviour too and started to consider its implications.

We saw it as more evidence that the attacker was either inexperienced at using Tornado Cash, or that they were on edge and acting irrationally. Either way, we felt like it might be good news for our chances of identifying and catching them.

A victim is refunded — who are they, and why?

Moments after the Tornado Cash transfers something even more remarkable happens. Out of nowhere the attacker sends 100 ETH to the victim who sent the message quoted above asking for the attacker to take a deal. The refund is even more than the victim lost in the attack (closer to 88 ETH). Why did the attacker do this? Social media lights up. Theories start flying.

Perhaps the attacker just craves attention or enjoys the power dynamic. They know the impact of this refund will be to provoke many more people to start sending messages asking for refunds too. Why would they want to encourage that kind of behaviour?

Or perhaps the attacker felt genuine sympathy for the victim after their message. If so, why send assets back to only one person? Many other people sent similar heartfelt messages of loss. What is special about this user?

Or perhaps the refund victim knows the attacker. Even wilder, maybe they are the attacker.

Or perhaps the attacker is just trolling, responding negatively to the messages we have sent them with a ‘fuck you’ signal. This is how many users interpret the situation. Frustration boils over in some cases as people start to express their concern about our approach to communication. One user gave particularly stinging feedback in a message on chain:

This dude is clowning on you all, are you not embarrassed? Making threats against him with no leverage. Escalating then practically begging for him to return our money when you had NOTHING to offer. Now we re almost certain it isn t NK and what, still nothing? Why would your first move be to threaten him legally, as if he wasn t aware the FBI was looking into it already? Your only shot was to appeal to his evidently existing good nature and offer up the 10%, but instead you re out here sheepishly asking about next steps ? What a joke you ve made yourselves out to be.

Messages like these were difficult for our team to process, but also understandable considering the situation Euler’s users were in. People had been hard hit by the attacker’s actions and wanted to know that everything possible was being done to get a positive outcome. Whilst our team was working extremely hard towards that goal in the background, and nothing was done without a reason, ultimately we had nothing to show for our hard work at this point. And we didn’t want to jeopardise our strategy by commenting publicly. So the only thing we could do was keep pushing with the investigation. It seemed clear that we were going to need to make further progress towards getting some leverage on the attacker.

Refund victim red herring

We began to investigate the refund victim’s address, and what we found made our eyes light up. Unlike the attacker’s address, which was harder to connect to any real-world identities directly, the address belonging to the refund victim participated in many transactions that meant it was not too difficult to track it back to a likely owner.

That person turned out to be a developer who had contributed to building another lending protocol. Which seemed very coincidental indeed.

At this point we have identified that the refund victim has means to commit the attack. We also find evidence of their familiarity with the Euler code base and there are other significant links too. No smoking guns, but a lot of coincidences. Little did we know that we weren’t the only ones looking into the identity of the refund victim though.

Later that day a crypto media outlet tracked the refund victim down independently and put it to them that they might be the hacker (see the article here). To which the refund victim replied: “Seriously? No, I’m not the hacker.” Shortly after the user returned the excess 12 ETH sent by the attacker to the EulerDAO treasury with the message:

I was affected by the recent Euler Finance hack and fortunately, I received back 100 ETH from the hacker, which is 12 ETH more than my original deposit of ~78 wstETH. With this transaction, I’m returning the extra 12 ETH that doesn’t belong to me to the Euler Finance Deployer.

Could this all be a coincidence? Ultimately it turned out to be just that. For a short period of time though it appeared that it could be a major breakthrough. But it was just one of several red herrings that turned up during the investigation.

March 17th

Attacker sends funds to North Korea
At 3:48 am UTC on March 17th the attacker makes a new transaction. This time it is not to a victim, himself or to Tornado Cash, but, astonishingly, to an address labelled as Ronin Bridge Exploiter. This is the address of an exploiter that carried out an $600M+ attack on a bridge protocol a year earlier. What is astonishing about the address is that it was attributed by the US Treasury’s Office of Foreign Assets Control as belonging to Lazarus, a group of state-sponsored professional hackers that do work for North Korea.

This is a major escalation and marks a major shift in the nature of the investigation. On the one hand, this could be a major blow as it could be a signal that the attacker is Lazarus themselves or is so confident in their ability to not get caught that they can comfortably troll Euler users by transferring funds to a sanctioned entity.

On the other hand, we had already gathered a lot of information about the attacker at this point and were confident that they were not associated with Lazarus. So we felt like this was either a poor attempt at misdirection or someone spiralling and out of their depth. Both of which were good news for our chances of catching them.

March 18th

Attacker sends a small percentage of funds back to Euler
Given what happened the day before, we were not expecting the attacker to send assets back to Euler users anytime soon, but at 6:20 am UTC on March 18th, that’s exactly what they started doing.

Beginning with a transaction for 1000 ETH, a total of 3000 ETH is sent back (worth ~$5.3M). Overall, this amounts to less than 3% of the total stolen funds, so is a drop in the ocean in the scale of things. Whilst the initial transaction gets everyone’s hopes up, it’s hard to take this as a positive signal when the assets stop being sent back. Given what happened the day before, it feels like the actions of someone trolling or at best unsure of what to do next.

The attacker has now sent stolen funds to a second attacker-controlled address, Tornado Cash, a seemingly random victim, Lazarus, and Euler. There seems to be no real rational explanation for this behaviour, unless they are just trolling, which is how most people interpret it at the time.

A few hours later, at 10:20 am UTC, another transaction is made. This time it is an empty transaction, with no message or ETH sent. This could be seen as yet more trolling, and we think that is the most likely reason for it, and yet, there’s an outside chance it is a prompt to communicate. We need to respond. Despite it feeling like the attacker is still just trolling, at 12:00 pm UTC we send a message that attempts to encourage a continuation of funds returned:

Thank you for returning a portion of the assets. The original offer still stands if you would like to continue by returning the funds. The reward for information will be removed immediately and all our investigations will be dropped.

In the meantime, we have now gathered a lot of information about the leads we have been following. We have been working non-stop on the investigation since the day of the exploit.

We ponder whether or not to get on the front-foot a bit more, reaching out via back channels to leads. Doing this could be risky though, because we could alert the attacker themselves, causing them to flee, or disturb someone entirely unrelated, causing them to protest their innocence on social media. Ultimately we decide to bide our time and keep working.

Team safety

Meanwhile, one of the key team members helping on the investigation called me in the early hours of their day. They wanted to discuss their personal situation because, for a variety of reasons I can’t disclose, they weren’t feeling safe. We explored options to help increase the safety of their situation and even talked about getting them on a plane that very day and putting them up in alternative accommodation abroad. It was traumatic in the extreme for the person involved. They could have been forgiven for walking away at that point, but if anything it only redoubled their resolve in the coming days. Words can’t express my appreciation for the dedication and resolve of our team.

March 19th

The team continues to do intensive research potential leads, but it’s Sunday and the attacker appears to be taking a day off. Not so for the Euler team — much was happening behind the scenes. Although there were some days where little was publicly disclosed or there was little visible communication, there was hard work around the clock — running down each and every lead, helping to coordinate multiple parallel and tangential investigations, and other things we cannot disclose.

March 20th

A breakthrough?
On March 20th at 4:10 pm UTC, a new mysterious message comes through from Euler Finance Exploiter 1. This one simply reads:


There is lots of speculation among our investigation about what this might mean. It shows up as a tank on google search. Perhaps it is something encoded as bytes. 2 and 7 are the first few digits of Euler’s number ‘e’. Is this just more trolling?

As the debate rages, a breakthrough moment happens. At 4:51 pm UTC, a new message is sent from Euler Finance Exploiter 2:

We want to make this easy on all those affected. No intention of keeping what is not ours. Setting up secure communication. Let us come to an agreement.

At 7:14 pm UTC we respond:

Message received. Let’s talk in private on blockscan via the Euler Deployer address and one of your EOAs, via signed messages over email at [email protected], or any other channel of your choice. Reply with your preference.

We eagerly await a response, but none is forthcoming. Was this just yet more trolling? The use of the plural ‘we’ is a point of interest. We continue to keep digging and uncover more information about the leads we have been working on. The team has been working around the clock on this, with many of us getting 3 hours a night sleep.

March 21st

The return of Lazarus
It’s now March 21st, and we are still hard at work, but the day is going slowly. The risk feels like it is growing that the attacker is buying time in preparation for something unpleasant, perhaps to flee or strike a deal with another black hat. It’s been 8 days since the exploit and less than 3% of the funds have been returned.

All of a sudden, at 5:02 pm a new message is sent. This time it is not from the Euler attacker though. It is from the Ronin Bridge Exploiter to the Euler Finance Exploiter 2 address:

Decrypt with the private key of 0xb66cd966670d962c227b3eaba30a872dbfb995db (https://github.com/LimelabsTech/eth-ecies).


This is extremely alarming. It’s clear immediately what is happening. Lazarus is trying to counter-exploit the Euler exploiter. If the Euler exploiter loses the funds to Lazarus they are gone forever. We respond as quickly as we can with a flurry of messages. The first message we send out straight away reads:

Be very careful using that decryption tool. The simplest way out here is to return funds.

Shortly after we follow up with another message:

Do not try to view that message under any circumstance. Do not enter your private key anywhere. Reminder that your machine may also be compromised.

And finally, after digging deeper, with yet another message:

Do NOT use the suggested decryption tool. It has an old version of ellyptic, which has a vulnerability:


“There is no check to confirm that the public key point passed into the derive function actually exists on the secp256k1 curve. This results in the potential for the private key used in this implementation to be revealed after a number of ECDH operations are performed.”

The drama of this is not lost on people watching events unfold on social media:

Moments later, a new message is sent from Euler Finance Exploiter 2 to us:

We still want to do the right thing returning funds to the Euler team. Will communicate shortly.

Breakthrough! Or so we think.

March 22nd

Private communication attempt number 1 begins
Hours go by without any communication. It feels like another dead end. I could not be more tired having stayed up all night discussing the previous day’s events. Then finally, at 2:24 pm UTC on March 22nd, a new message comes in from Euler Finance Exploiter 2:

Euler: from [email protected]

After 9 days since the exploit, we appear to have a line of private communication. The attacker’s opening message is:

Dear Dr. Michael,

From this email address we should talk privately with you and the Euler Team. It is in our best interest to step out of this unfortunate situation as soon as possible. I hope that we can define a course of action in a few correspondences.



Is this someone acting in good faith or just more games though? It’s interesting that the email refers to ‘us’ and ‘we’ and is signed from ‘Jacob’. Is the plural a bluff, or are we really dealing with a team here? Why did they address me specifically, and not the project more generally?

And what is the significance of the name Jacob? Clearly that is not the attacker’s real name. One possibility we explore is that it is a biblical reference. Jacob is a character in Genesis sometimes referred to as the ‘righteous deceiver’. In some bibles the name also apparently means ‘he cheats’.

Then we discover there is potentially a link back to the refund victim. Someone from the investigation points out:

fyi the santichez name on twitter is Santiago. which is Jacob. is a male Spanish name that derives from the Hebrew name Jacob. https://en.wikipedia.org/wiki/Santiago_(name)

We also explore if there is any further information to be gained from the email address itself. One of the sleuths comes back with an answer:

“errrrrrrrrrrrrrr what if he’s fucking with us, inta chez would translate to “you are gay””

Overall it still feels like this is still someone not taking things seriously. Nevertheless, we write a short email response and wait.

March 23rd

An eventful hospital trip
Meanwhile, at home, my eldest child is ill (later, we discover, with covid). With my wife looking after the newborn, I have been looking after my eldest as best I can during the night time on top of everything else. In the first few days after the exploit I had pretty much no sleep. That increased to 3–4 hours a night for a few days, but it dropped back to more or less zero with the new health issues at home. Obviously that isn’t a sustainable amount of sleep to be having, especially given everything else going on.

After a stressful start to the morning, sometime after lunch on March 23rd I suddenly start having pains in my chest and I’m struggling to breathe. My wife brings me to the hospital, where it could not be busier. As we enter the waiting room, at 1:45 pm UTC, a new email comes in from the attacker. I sit waiting for quite a while to be seen, responding to messages from our team as we explore options for replies.

Eventually I’m met by a doctor and told that I need an electrocardiogram to check my heart, which they are supposed to do very quickly for someone with my symptoms. But as anyone that has dealt with the NHS recently can attest, things rarely go smoothly. There are simply none of the machines available in the Accident and Emergency part of the hospital. So one of the doctors offers to walk me down to the nearby Resus (i.e. ‘resuscitation’) department where there is likely to be one free.

I kid you not, as we walk into the room, I hear the characteristic long beep as someone in a nearby bed goes into cardiac arrest. Alarms suddenly started going off everywhere and I was pushed out into the hallway. I could hear family members crying and doctors shouting. My anxiety hits a new high, but the experience helps keep things in perspective.

Over the course of these hours, I was conscious that we’d not replied to the attacker. That amount of delay is simply not ok when so much is on the line. So I sat among the other patients and crafted a response with our team while having blood tests drawn. After this, I promptly passed out from exhaustion.

After waking up and settling again in the waiting area with a dead phone and dying laptop, a few hours later I was told my symptoms were more likely the result of anxiety and a panic attack than a heart attack, and was sent home where I finally had a few hours sleep.

March 24th

A lot of investigative forensic work continued, much of which we can’t discuss in detail. The weekend is bearing down on us and we don’t want the attacker to have time off to think, but do we push them again? We decide against it, but continue our internal investigations.

March 25th

Almost 50% of stolen assets are returned
Then, on March 25th, at 3:08 pm UTC, 51,000 ETH (worth ~$90m) is suddenly returned by Euler Finance Exploiter 2 to Euler in a new transaction. That’s almost half of the assets returned now. Are they planning on returning all of them? Either way it’s a huge moment for everyone involved, especially Euler users. Even a 50% recovery from an attack like this is almost unheard of. Moments later a new message is sent on chain though:

“sheeps4music at xyzmailhub.com”

It seems like maybe the attacker wants to open a new line of private communication. What is wrong with [email protected] though? We quickly check and the latter email is longer operational. Then things go crazy again, as they always seem to do. Two steps forward one step back.

Prisoner’s dilemma or a bluff?

The attacker sends from Euler Finance Exploiter 2 4 more transactions of ~7700 ETH each (worth ~$13.5M each), this time not back to Euler, but to four new attacker-controlled addresses: 0xa1b44d…F4D8e6760x46e0Be…8c50Cf550xC4e04A…3b7b208E, and 0x8765A3…D8E38A4c. These addresses also subsequently each receive ~10.7M DAI from Euler Finance Exploiter 2 as well. This means each of the four addresses controls around $24M worth of the stolen assets (~$13.5M ETH + ~$10.7M DAI).

The last of these transactions is at 3:32 pm UTC. At this point, it looks like the exploiter has decided to keep more than 50% of the stolen funds. Why have they distributed the stolen assets among four addresses though? Are there four attackers?

A few minutes later though, at 3:38 pm UTC, address 0x46e0Be…8c50Cf55, sends a transaction of all their ~7700 ETH back to Euler, along with a cryptic message seemingly pointing to an email address for further communication:

x @ proton.me

Around 30 minutes later, at 4:08 pm UTC, they then send their DAI back to Euler too. Well, sort of. Of the 10.7M DAI they hold, they send ~1.23M DAI back to Euler in this transaction. Then a flurry of peculiar messages follows. First, at 4:09 pm UTC, they message:

email me ASAP will give up every fucking thing about hacker for 15%

Then, at 4:15 pm UTC, they bizarrely lower their offer with another message:

email me ASAP will give up every fucking thing about the hacker for 10% like offered.

And then at 5:07 pm UTC, they appear to drop negotiations entirely with yet another message:

Euler exploiter 3 here.. please just email [email protected] .. will reply with info ASAP.. dont care about buonty

We send emails to the two email addresses [email protected] and [email protected] but both seem to be dead ends. What on earth is happening in all this?

One interpretation is that the attacker is actually a group of four individuals, and they have decided to send ~50% of the funds back to Euler and then split the rest equally among themselves. But then, in a classic prisoner’s dilemma style standoff, one of the individuals has decided to break rank. Whoever controls 0x46e0Be…8c50Cf55 seems worried about being caught and is trying to lessen their future sentence by trying to return stolen assets voluntarily in a show of good faith.

At this point, however, the story is not compelling. We send an email to [email protected] calling the attacker’s bluff, making it clear that the time for games is up. Minutes later they give up the charade, transferring the ~9.5M DAI remaining in 0x46e0Be…8c50Cf55 to one of the other four attacker-controlled addresses in this transaction.

At 7:43 pm UTC the sleuths assisting the investigation notice a new message come through on chain from the attacker offering a new email address [email protected] to talk over. They ask what it is about (they were not privy to private communication over email) and I tell them we had received an email from that email address and had asked for confirmation on chain that it was genuine. The message they were seeing was simply a confirmation message. Meanwhile, over email, a new round of discussions are underway with the attacker, this time with a very different tone. At 8:45 pm UTC I message the sleuths:

The conversation with the attacker continues into the early hours of the next day. Our approach appears to be working.

March 26th

It’s a frustratingly quiet day on the communication front, but the team continues the forensic work at all hours. It is unclear if the response from the attacker was merely more trolling or an attempt to buy more time.

March 27th

On the following day, the pressure campaign begins to pay off and the attacker starts sending more of the stolen assets back.

First, at 6:13 pm UTC, a transaction from 0xa1b44d…F4D8e676 sending ~7700 ETH (~$13M) back to Euler.

Quickly followed at 6:21 pm UTC by another transaction from 0x8765A3…D8E38A4c sending its ~7700 ETH back.

And then another at 6:29 pm UTC from 0xC4e04A…3b7b208E sending its ~7700 ETH back.

A few minutes later at 6:40 pm UTC the attacker sends a further ~10.7m DAI back to Euler from 0x8765A3…D8E38A4c.

At this point it looks like they might be about to return all of the stolen assets, but as usual, they take pause.

At 6:58 pm UTC they send a transaction for 20M DAI from 0xa1b44d…F4D8e676 to a brand new attacker-controlled address 0x0d1B0c…70DA9843. What are they planning to do with this? Are they going to try to keep 10% of the total stolen? It seems possible. That offer is no longer on the table though. It had long been withdrawn.

At 7:24 pm UTC they then send another transaction for 3M DAI from this new address back to Euler, leaving 17M outstanding in the new wallet.

New emails are then exchanged over the course of the next few hours. The attacker mentions retaining hold of assets as a ‘safeguard’. We are pushing hard at this point.

March 28th

A few hours later, in the early hours of the 28th, they ask for forgiveness for the harm done to Euler’s reputation and the time taken away from me with my son. At 1:23 am UTC we reply:

I’m sitting with my wife and son right now typing this message. You’re right that you can’t change those first few days with my newborn. But you can change tomorrow for me. He’s two weeks old now. I would love to spend the day with him. I really do not care about winning or losing or the reputation of the protocol. None of that matters in the end. The same is true for you. The money, which you can never spend, is completely useless to you if you can’t live a full life after this.

A little while later several new messages are sent on chain.

First message from the attacker at 1:56 am UTC:

The rest of the money will be returned ASAP. I only look after my safety, and that is the reason for the delay. I’m sorry for any misunderstanding. Please read my next message.

Second message from the attacker at 1:57 am UTC:

Jacob here. I don’t think what I say will help me in any way but I still want to say it. I fucked up. I didn’t want to, but I messed with others’ money, others’ jobs, others’ lives. I really fucked up. I’m sorry. I didn’t mean all that. I really didn’t fucking mean all that. Forgive me.

Back on email the attacker requests to talk to me personally over a call or through voice messages to get reassurances. It’s 4:14 am UTC, and I’m beyond tired, but I agree to do it on the proviso that the remaining funds are returned. Sometime after, more funds are returned to Euler.

transaction at 4:51 am UTC sends a further 5M DAI back to Euler from 0x0d1B0c…70DA9843.

A few more hours go by, and then at 8:28 am UTC I receive my first direct message over a social media platform. This was clearly essential to engage with to continue to build trust and encourage the return of funds, but also extremely high risk. I knew that if I were to say the wrong thing the remaining assets might never be returned. I was very conscious that it could also have been a trap.

In the conversation I continue to press for the return of the remaining assets whilst also trying to build trust and keep things moving. I asked at one point whether he considered the bug bounty too small and why he didn’t consider taking that route instead of carrying out the exploit. He said it wasn’t something he really considered. His answer was that he wasn’t experienced enough to know about all the options he had available to him once he knew about how to carry out the exploit; the attack was apparently hypothetical for him until the last minute, and he wasn’t even sure it would work.

We talk for some time until the midwife arrives to see my wife and son. It feels like a natural point to end the conversation so I urge him to return the funds whilst our appointment is underway.

Then it all goes quiet again. Recovery stands at around 84% at this point. The pressure to say something publicly is enormous by this point, but we know that if we do and get it wrong, any progress we’ve made could quickly unravel.

March 29th

Following the private conversation our team has a lot to work on.

March 30th

We sense the attacker’s anxiety and fear they may have changed their mind. I replay the conversation we had over and over again in my head. That night I can barely sleep again. I send my wife this message at 1:01 am UTC:

I started experiencing this exploding head syndrome phenomenon most nights before I went to bed after this point. It’s apparently not that uncommon, but I had never experienced it before and it really shook me. Fortunately I haven’t had it in a long while.

March 31st

The next day starts slowly, though quickly picks up. In the early afternoon, a number of transactions come through. Are we done? Of course not.

Unfortunately the transactions all involve sending small amounts of dust back to Euler. There are still millions of dollars worth of assets unreturned. Are these dust transactions just more trolling? Or are they some kind of signal?

transaction at 2:41 pm UTC sends dust ETH back to Euler from 0xC4e04A…3b7b208E.

transaction at 2:42 pm UTC sends dust ETH back to Euler from 0x46e0Be…8c50Cf55.

transaction at 2:43 pm UTC sends dust ETH back to Euler from 0x8765A3…D8E38A4c.

Shortly after, at 3:12 pm UTC a new cryptic message is sent from the attacker to a seemingly brand new address. It simply reads:

“Was asked for this

It looks like a confirmation message for someone the attacker is in private conversation with. We know it isn’t us who asked for it though. Who is it for? There is a lingering concern that he is in the process of making some kind of deal with another black hat to launder the remaining stolen assets.

A little while later we start to better understand what’s happening though. I received a message from none other than Laurence Day saying that someone has been trying to contact me. The message to him was from a member of the Euler community who claims to be the intended recipient of the ‘was asked for this’ message.

It turns out that starting March 29th, during the period of silence we have had with the attacker, they have forged direct contact with two Euler community members on social media. The motivation for doing this isn’t entirely clear. It’s hard to understand why the attacker hasn’t just returned the remaining assets. Is this more misdirection? Is it delaying tactics? Is it trolling? Can the community members be trusted? Clearly we need to continue to tread carefully.

From talking to one of the community members it seems the motivation of the attacker for reaching out to other people from the community is to get advice on reputation management and a second opinion on the best course of action next in terms of returning the remaining assets. They are also talking about taking out loans, which sounds concerning. The attacker also tells one of the community members they are waiting to meet someone later that evening to discuss their plans and help them manage their safety. Again, this sounds more than a little ominous.

April 1st

I ask one of the sleuths from the war room to reach out independently to the attacker over social media to bring a fresh impetus to things and reiterate the message that the best way out is to return the stolen assets as soon as possible. As with all communications that went out, it’s a carefully crafted message, deliberate and strategic.

April 2nd

By the evening of April 2nd things have once more become intolerable. The promise to return all assets has not been met and it seems like the attacker is once again not operating in good faith. We push more, taking a direct approach and sending them an email reminding them of what is at stake for them.

I’m starting to feel incredibly unwell by this point. Something about the symptoms reminded me of how I felt when I first caught covid, so I decided to take a test. Sure enough it was positive. When I spoke to my wife she too was feeling unwell and tested positive. It seems likely our eldest was patient 0. We assumed our newborn son would be fine since covid rarely affects babies.

Meanwhile our latest email has had the desired effect, and contact is reestablished just a few hours later. This time the attacker messages me again from a different social media account. I urge them to end things immediately. They request that things can be ended without resentment. At 11:49 pm UTC we offer reassurance:

“Not that kind of team. Everyone just wants to move on. Be great if it ends with a positive story.”

It seems like their conversation with the war room sleuth has also picked up, but as usual, things then go quiet. It’s 5 am local time by the time I can finally sleep.

April 3nd

Safe to say we’re all ready for this to be over at this point. At 8:02 am UTC the attacker sends me a new message saying funds will be back within the hour. I can’t allow myself to believe it. Sure enough, at 9:36 am UTC they say it is taking longer than expected. We ask them if it is guaranteed to be done by 2:00 pm UTC. They say it is.

At 12:56 pm UTC they ask where the remaining assets should be transferred to. We tell them to the DAO treasury address. This feels like it could be it. I message the Euler team a couple of minutes later:

Does it happen? No.

Minutes go by. And keep going by. Each one feels like an hour. At 1:50 pm UTC we nudge the attacker. They respond at 2:07 pm UTC saying there’s not much left to do. We demand an update. We then let the Euler team know things are still very uncertain:

At 3:35 pm UTC we press the attacker again. A minute later they respond, making a request. We reject it and remind them it is important to return the funds before people think they have changed their mind.

At 4:13 pm UTC we ask what the delay is about.

At 5:52 pm UTC they message saying 30 more minutes.

At 7:03 pm UTC they message saying they are ready to go.

At 7:45 pm UTC they message saying they have emailed a list of requests. One of them asks me to:

organize a party for you and your team, with nice food and drinks, and beautiful girls, somewhere in the future

Are they trying to actually be nice or is this a joke? It certainly seems at this point like this could be just another game. I’m at the end of my tether. I would love nothing more than to scream back at this point. But there’s obviously little sense doing that. So we get to work crafting a response to the requests. We opt to hit each one with a straight bat.

At 9:14 pm UTC we reply to a direct message saying the email response is nearly ready. We end by saying:

“Has to be now though. Further delay is a red line.”

At 10:01 pm UTC the email response is sent.

Every question answered. Including the party one, to which we say simply:

“Respectfully, this is a time for humility and reflection and does not seem like the right time to think about a party.”

At 10:16 pm UTC they respond on direct message:

“Going for it”

There is another frustrating wait, and I’m trying not to lose my patience with them. Then, finally, a transaction at 10:49 pm UTC sends a further 12M DAI back to Euler from 0x0d1B0c…70DA9843.

At 10:51 pm UTC they send a message saying that they know I hate them. We reply:

“I don’t hate you. Really wish you hadn’t done it obviously, but everyone makes mistakes. Important thing is you’re making it right so that everyone can focus now on the future.”

Minutes later the remaining funds are returned. First a transaction at 10:54 pm UTC sends all the remaining assets from Euler Finance Exploiter 1, ~8080 ETH (~$14.6M) back to Euler. Then a transaction at 10:59 pm UTC sends all remaining assets from Euler Finance Exploiter 4, ~2500 ETH (~$4.5M) back to Euler.

It’s over. In the end, the strategy worked. There is much that cannot be disclosed, but the attacker was compelled for a number of reasons to return the funds.

At 11:07 am UTC we announce the news with a single tweet:

At 00:15 am UTC we write to the sleuths in the war room to thank them for their support.

April 4th

Covid setback creates communications challenges
The next morning there were lots of messages of congratulations, but I was feeling so rough that I could honestly barely feel anything about the outcome. Our team was exhausted, but were already hard at work handling the enormous challenges still ahead of us.

Meanwhile, my son was also getting quite ill. We ended up having to call an ambulance. Both him and my wife suffered complications from covid and spent several days in hospital.

During those days there were a lot of questions about what happened from journalists and questions about what the next steps would be from affected users. Given the health issues in my family it was hard to contribute to communications though and whilst many people were thankfully sympathetic to the situation, some grew a bit frustrated.

The challenge was that very few people actually knew what had happened or had information to share because we generally kept things incredibly tight-lipped during the recovery process. People in the broader Euler team and many in the war room had only a little more information than the general public.

Unfortunately, the information vacuum led people to speculate on what might have happened, and some on social media got quite creative with their ideas and came to the conclusion that it must have been us all along:

You got us, Chris!

The media also started speculating about what had happened. One article claimed to have interviewed a key Euler negotiator. Others speculated that Euler had been bailed out by influential partners. Seeing people who had played relatively minor roles — or no role at all — in the recovery story receive public adulation was quite disheartening for our team who had really given everything.

There was plenty of other misleading information floating around too, including about the attacker. So much so that the attacker even messaged us about some of the stories at one point, seemingly annoyed that our team had perhaps been briefing against him to the media. The reality was that we had not spoken to the media about the attacker. The only time we had done so was to seek corrections for misleading stories.

Rest of the year

At some point during this process my wife and I began to worry more about our home security. There were stories being published around the time of the exploit about people being tortured in their homes over their crypto holdings. And here we had hostile messages, an active attacker, Lazarus involvement, potential organised crime links, a social media firestorm fueled by misinformation, among other things. Some of the hostility has been pretty relentless — the joys of being a public builder in crypto.

At home, we had additional security systems fitted and I began exploring better ways to secure my private keys. I wanted them sharded and records proving that they weren’t kept inside the house. I eventually found a solution and everything seemed to be fine. Then in November one of my hardware wallets developed a fault. Not a problem I thought, I’ve got the private key. Ultimately it turned out I didn’t though.

Somewhere in between the birth of my son, our exploit recovery efforts, personal and family illnesses, I made an error and it turns out that one of the private keys is no longer recoverable. This means that I’ve now lost a substantial percentage of the crypto assets I held in cold storage, accumulated over more than seven years, including the majority of the EUL allocated to me for participating in Euler governance (~4.4% of the total supply is now effectively removed from circulation).

In terms of my Euler allocation, I am currently considering my options and will likely make some form of proposal to the DAO at some point. My focus right now is entirely on the relaunch though. Ultimately I take responsibility for whatever happens next. I would have once found this outcome absolutely devastating, but the earlier events of the year really helped put the important things in life into perspective for me.

January 2024 Update

Good news! I have recovered my wallet. Thanks to everyone who supported me. Fingers crossed 2024 continues as it started.


So there it is. A turbulent tale, but one with a (mostly) happy ending. While many might have lost their resolve following an ordeal such as this, I couldn’t be prouder of the way the Euler Labs team came together to solve an almost insurmountable challenge. Even in the best of circumstances, a 100% recovery of assets is a rare outcome. With crypto, it’s almost unheard of.

We’re hugely grateful for all the support and warm wishes we received along the way. While the words above share my perspective, they represent the work of dozens of people on the Euler team and beyond, from all around the world. That same Euler team has been hard at work over the past year building a stronger, more powerful and modular V2 of the Euler platform which we’re excited to help rollout over the coming weeks and months.

The story doesn’t end here — the only way is forward.

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