cointelegraph.com
According to a new post on Jan. 26, Marc Zeller, integrations lead at decentralized finance (DeFi) lending protocol Aave, stated that the firm purchased 2.7 million Curve ($CRV) tokens, which would clear “excessive remaining bad debt” within the next 15 hours over a dozen transactions. The move follows the community approval of Aave Improvement Protocol (AIP) 144, which deployeda swap contract that acquires 2.7 million units of $CRV, with a USD Coin (USDC) spend limit of $3,105,000 and a maximum unit value of $1.15 per $CRV.
The bad debt on the Aave protocol resulted from a sophisticated exploit that took place on Nov. 23. Avaraham Eisenberg, who previously drained DeFi protocol Mango Markets and caused $47 million in net damages, took on a series of heavy volume short $CRV positions on Aave in an attempt to orchestrate a short squeeze and force developers to buyback his positions at upward of 100% slippage due to lack of liquidity.
However, it turned out Aave had much more liquidity than anticipated, and Eisenberg reportedly lost $10 million on the trade. Nevertheless, some slippage occurred as a result of the incident, and Aave was left with a total of 2.656 million $CRV in bad debt while liquidating Eisenberg’s positions.
The same day, Mango Markets filed a lawsuit against Eisenberg, asking the court to rescind its $47-million bounty agreement with the hacker for his role in the $117-million exploit on Oct. 12, 2022. The United States Securities and Exchange Commission has charged Eisenberg with stealing $117 million in digital assets. Eisenberg was arrested in Puerto Rico by the Federal Bureau of Investigation on Dec. 27, 2022, on charges of commodities manipulation and commodities fraud.
