If there’s one thing more shocking than the fact that a hacker was able to exploit a software bug and drain some $320 million worth of cryptocurrency from something called Wormhole, it’s this: Backers of the project were able to replace the pilfered tokens in a matter of hours.
In another, not-so-distant era, this was the type of coding bug that could have threatened to put a traditional financial firm out of business. In fact, that almost happened to Knight Capital Group Inc. a decade ago. The electronic market-maker was driven to the brink of bankruptcy by some bad code, before a dramatic bailout among many of Wall Street’s best-known shops allowed it to avoid Chapter 11. The firm was later taken over by a rival.
In the case of Wormhole, the problem with the code turned out to be almost as disastrous as the one that forced Knight to seek a $400 million cash infusion to survive. Yet the move-fast-and-break things ethos of the crypto world was met with a startling move-fast-and-fix things response this time. Jump Trading Group, which helped develop Wormhole, put up the money to replace the 120,000 wETH, or "wrapped ether,” that the hacker was able to create and then abscond with.