ChangeNOW Returns £10.5M Worth of COMP Lost to Compound Finance Heist

Cryptocurrency exchange platform ChangeNOW has returned 45505 COMP (worth approximately £10.5 million) to Ethereum-based decentralised finance (DeFi) protocol, Compound Finance. This kind gesture followed an active collaboration between the exchange and the unnamed user who had received the large COMP reward because of a bug with the Compound Finance protocol.

On September 30, the Compound Finance community passed a proposal that was designed to improve its protocol. However, the code for execution mistakenly included a bug that caused excessive rewards to become available to past Compound users. The bug is estimated to have put over £110.4 million worth of COMP tokens at the risk of being wrongly claimed.

The ChangeNOW user was apparently among those eligible to receive the windfall and had claimed it from Compound to exchange it via the platform. However, ChangeNOW’s anti-money laundering (AML) protocol flagged the transaction because of the large size, causing the exchange to reach out to the user to resolve the problem. 

Upon discovering that the funds were from the Compound protocol heist, ChangeNOW collaborated with the user to agree on returning the funds to the DeFi project. The user, who was eligible to keep 10% of the funds as a reward for their white hat effort, ultimately opted to return the amount in full to an address specified by Compound. 

Compound Protocol’s founder, Robert Leshner, has also confirmed receipt of the funds, publicly thanking ChangeNOW on Twitter for helping out. The amount returned by ChangeNOW is approximately 10% of the total funds at risk, and will minimize any losses faced by Compound ahead of a fix for the bug in the next few days.

Although crypto industry experts believe that DeFi protocols will eventually replace their centralized counterparts, the ChangeNOW and Compound Finance development suggests that both sectors will be crucial in driving the adoption of crypto assets. 

As alluded to by ChangeNOW in its announcement, “Bugs and leaks in the crypto industry are somewhat inevitable,” and active collaboration between affected parties represents the only way to recover assets that could otherwise be lost permanently.