ZKLEND opens recovery portal for affected users at $9.6 million in February Exploit

Zklend officially launches a recovery portal and can claim lost funds in response to the platform’s exploits on February 12th.

The Decentralized Lending Protocol announced the activation of the portal in a March 5th post on X, advised users to verify communications through official channels before accessing claims. The exploit drained $9.6 million from Zklend’s pool, prompting the platform to stop withdrawing and investigate violations.

Shortly after the hack, blockchain security company Cyvers reported that the stolen funds were placed over the Ethereum (ETH) network. Hackers have tried to wash their funds through Railgun, a privacy protocol. However, Railgun’s internal policy has resulted in the stolen property being returned to the hacker’s original address.

After the attack, Zklend tried to negotiate with the hackers and offered a 10% “white hat” prize in exchange for the return of the remaining 3,300 ETH. Despite the February 14th deadline, no funds were acquired. To track stolen funds, Zklend seeks the help of law enforcement agencies and key experts from Binance Security, Starkware, and The Starknet Foundation.

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On February 20th, Zklend detailed his recovery plan. Deposits in the unaffected pool will be fully refunded, but affected users will receive partial compensation and claim positions in Zklend recovery pool. The withdrawal is expected to begin two weeks after the billing portal audit.

To the user,
Unaffected pool deposits are expected to receive a full return of funds, and impacted pool deposits will receive a partial return of funds, along with the billing position against the Zklend Recovery pool. …The withdrawal process will begin in 2 weeks…
– zklend (@zklend) February 20, 2025

Experts considering the case suggest that the hack is due to a flaw in contract logic, not a failure in Starknet’s proof system. This hack highlights the general issues with smart contract security in the Defi industry.

The Recovery Portal provides a path to advance for affected users, but full management of Zklend exploits closely monitors the platform’s function to rebuild trust.

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