Coinbase Suspends PlayDapp Trading After Hack

Coinbase has temporarily suspended the gaming platform PlayDapp’s token trading and transfer activities after the recent hack that resulted in the theft of 200 million PLA tokens. Recent updates from the Web3 platform have shared some insight into the investigation process.

Suspension Of Trading Activity On Coinbase

On Thursday, the news of the hack was first informed by the security platform Cyvers Alerts on X (formerly Twitter). PlayDapp’s team later confirmed the security breach and immediately contacted partnered exchanges to take measures to protect the holder’s assets.

The gaming platform contacted major centralized exchanges (CEXs) to request deposit and withdrawal suspensions due to the hacking incident and promptly reported to the authorities about the case.

On Monday, the team shared an urgent notice post detailing the state of the investigation and the temporary measures it would take to minimize the hack’s impact on PLA holders.

Following this request, Coinbase announced the suspension of PLA’s trading and transfers across their website, Coinbase Prime, Advanced Trade, and Coinbase Exchange. The exchange expressed its intention to continue monitoring the developments from PlayDapp before giving new updates to customers.

We will continue to monitor developments related to PLA from the issuer and update our customers as more information becomes available.

Learn more: https://t.co/PoDxz71eAp

— Coinbase Assets 🛡️📞 (@CoinbaseAssets) February 14, 2024

In the notice post, the team informed of its current collaboration with exchanges, blockchain intelligence, security firms, and law enforcement agencies to investigate and resolve the issue further. It has now extended its petition to temporarily pause all liquidity and pool activities related to PLA to decentralized exchanges (DEXs).

According to the circular, decentralized exchanges (DEXs) have hindered the hacker’s attempts at dispersing the stolen tokens.

Migration Process And Price Reaction

PlayDapp tried to negotiate with the hacker to retrieve the stolen funds. However, the attempts failed as the hacker “showed no willingness to help recover holders’ losses,” which resulted in an additional attack that led to the issuance of an additional 1.59 billion PLA tokens.

Subsequently, the team continues investigating the hacker’s intrusion methods to prevent further attacks, and they’re currently tracking the minted and swapped tokens by the hacker. Due to this, PLA Holder’s assistance has been requested, asking users for “the halt of transactions because we will conduct a migration based on the snapshot shortly.”

The platform has been discussing with exchanges to assess the best migration solution. The most recent update further details the attack’s damages and the coming migration process:

We are estimating the scale of damage for the initially minted 200 million tokens, while it’s confirmed that there is minimal damage from the secondary minting of 1.59 billion tokens. Currently, the transactions associated with the hacker are being tracked by security firms, so most of the invalidly minted tokens will be filtered out during the migration process.

Loss of ownership over the token smart contract opens the possibility for further attacks on PLA tokens.

As the update explains, PDA is an upgraded version of the new token. It introduces multi-signature implementation, snapshot, pause, and burn authority separation for management while removing minting authority for stability.

PDA will also introduce a DAO voting system, and it can only be swapped at a 1:1 ratio using wallets not associated with the hacker.

PlayDapp will coordinate with CEXes to reimburse PDA to PLA-holding users during the migration. Affected users will be reimbursed using the “current user balance holdings as per the snapshot timing” and receive the full token holdings at a 1:1 ratio. The team will announce the snapshot time in a future update.

According to CoinMarketCap data, the PLA price dropped from $0.1823 to $0.1498 after the attack. Since then, the token price has hovered around $0.14-$0.16.

The price dropped to $0.1383 after the Coinbase announcement, a 13.35% drop in the last seven days. PLA’s daily trading volume at writing time is $5,786,268, representing a 23.4% decrease in the previous 24 hours.

However, after the most recent migration plan update, PLA’s price surged 1.2% in the last hour and 3.7% in the previous 24 hours, as the token trades at $0.1524, perhaps signaling a change in holder sentiment after the recent development.

PLA is trading at  $0.15 in the hourly chart. Source: PLAUSDT on TradingView.com

Featured image from Unsplash.com, Chart from Tradingview.com

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