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Fear & Greed:
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Bitcoin:
$ 64.292
BTC Dominance:
% 54.0
Market Cap:
$2.34 T

Millions in Crypto “Stuck” or “Forgotten” in Bridge Contracts, Arkham Reveals

Crypto Contract

The blockchain intelligence firm Arkham has found an alarming tendency in the crypto world that many of the identified crypto addresses hold millions of dollars either stuck or forgotten in bridge contracts. In an April 22 post, Arkham revealed that many accounts, including those of high-profile figures such as Ethereum co-creator Vitalik Buterin and big entities like Coinbase, are stuck in this situation.

Crypto Whales and Notable Figures Among Those Affected

According to Arkham, these accounts are holding six to seven figure ranges of cryptocurrency altogether, which is locked in bridge contract. The company pointed out several examples, one of which was a wallet that belonged to Vitalik Buterin who received 50 Ether (ETH) and since seven months the $1.05 million has been stuck in the Optimism bridge. This is however a fraction of Buterin’s vast portfolio, highlighting the issue.

Surprisingly, one more wallet associated with the Bofur Capital, possibly associated with a Celsius creditor, holds $1.8 million of wrapped-Bitcoin (WBTC) stuck in the Arbitrum bridge for 27 months. In the same vein, Thomasg.eth, the pseudonymous creator of decentralized air transportation solution Arrow, has $800,000 in Ether locked in the Arbitrum bridge.

Bridges are a problem to even big players like Coinbase. Arkham revealed that Coinbase did try to bridge $75k in USDC to Ethereum through the Optimism bridge six months ago, but the funds are still waiting to be claimed on Ethereum’s base layer.

Although these situations do trigger alarms, it is possible that the wallet owners keep control of the funds and having decided to park them for a while. However, the disclosures exposed the weaknesses of cross-chain bridges that serve as crucial elements in the modular blockchain networks exemplified by Ethereum.

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Bridge Vulnerabilities Highlighted Amidst Security Concerns

Bridges are designed to transfer the transaction responsibilities to layer 2 solutions while holding data availability and security at the base layer. Nevertheless, they are starting to attract hackers as a result of possible flaws in smart contracts or centralised validator sets.

The $650 million Ronin Bridge hack in March 2022 perpetrated by North Korea’s state-sponsored Lazarus Group is a good illustration. The group was able to gain the control of five out of nine private keys of the transaction validators, highlighting the importance of the strong security practices within the bridge infrastructure.

While the crypto community is wrestling with these issues, the findings of Arkham highlight the need for improved security procedures and caution in dealing with the changing world of decentralized finance.

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