Solana’s Loopscale Strikes Deal with Hacker to Recover $5.8M Stolen Funds

Solana (SOL)-based decentralized finance platform Loopscale has faced a major breach just weeks after its launch, which has shocked the Solana community and the platform. The platform lost over $5.7 million in USD Coin (USDC) and approximately 1,200 Solana tokens from its vaults, which made the losses exceed $5.8 million. This disruption forced Loopscale to immediately suspend vault withdrawal and freeze its market to prevent further losses, shared by the Loopscale team on X. 

Hacker Shows Willingness to Return Funds

The Loopscale hacker has taken a surprising turn, reporting on April 28 that the exploiter has responded to their offer of a white hat bounty. Whitehat bounty is proposed by the Loopscale platform: if the hackers return around 90% of the stolen assets, then they can keep 10%, about 3,945 SOL, which has a value of around $594,000, as a reward and would be released from any legal actions. Loopscale, in return, got a positive response just before the set deadline that enabled a swift move toward fund recovery and platform restoration. The Loopscale team on X shared, “At 3:52 PM ET today, we received a response from the exploiter. They have indicated a willingness to return the exploited funds in exchange for a bounty…”

At 3:52PM ET today, we received a response from the exploiter. They have indicated a willingness to return the exploited funds in exchange for a bounty.

We appreciate their engagement so far and we are actively working to reach an amicable resolution.

As such, we will be… https://t.co/znCZxtoi1z

— Loopscale (@LoopscaleLabs) April 28, 2025

Vulnerability Traced to Pricing Manipulation

Initial investigation revealed that the breach stemmed from the manipulation of the Loopscale RateX PT token pricing system. This technical loophole allowed the Loophole hacker to artificially adjust the valuation of the asset that was in the vaults, which directly impacted depositors in the USDC and SOL pools. Other operations, including the broader RateX collateral system, remain unaffected, according to Loopscale’s preliminary findings. 

Growing Wave of DeFi Security Breaches

As of April 28, 2025, the Solana price stands at $152.47, reflecting a +2.99% increase or gain of $4.43.  This price hike of the Solana network amid the recent exploitation highlights the recent optimism as Loopscale works to resolve the Solana DeFi protocol breach. The 2.99% bullishness in the price suggests that investor confidence may be returning as the platform implements new security measures and moves toward fund recovery. 

SOL/USD chart, published on Tradingview, April 28, 2025

The Solana network seems to be growing as of now, despite the Loopscale incident adding to a troubling trend in decentralized financial security. In the first quarter of 2025 alone, over $1.6 billion was reportedly stolen across various DeFi protocol, making it the worst quarter for crypto breaches on record. The other recent high-profile attacks include those on SIR.trading, ZKSync, and KiloEx, reflecting a rising pattern of price manipulation exploits and technical loophole abuse across the industry. 

Moving Toward Resolution and Platform Recovery

With the Solana price and Solana DeFi protocol, Loopscale is preparing to reopen vault withdrawals for users and is expected to publish a comprehensive postmortem analysis in the coming days. The detailed report will outline how the pricing system vulnerability occurred, which layers of protection failed, and what security upgrades will be implemented to prevent future attacks. Meanwhile, the platform functions like loan repayments, top-ups, and loop closing have already been re-enabled to help stabilize operations. 

Lessons in DeFi Crisis Response

Solana Loopscale DeFi protocol handling of the breach, particularly its swift bounty negotiation, was a smart move to counter the hack, and it offers a noteworthy case study for incident management in decentralized finance. The platform has prioritized open communication and proposed a reasonable whitehat settlement to do the fund recovery, demonstrating an alternative path to hostile legal pursuit. Despite the hack, the Solana price continued to grow, and the Solana network took this hack as a lesson to enhance platform security, pre-planned bounty frameworks integration, and enhanced dynamic pricing protection. This is needed to create a strong foundation for decentralized finance.