the binance hacker just did something genius and it should scare you

tether froze $1.5 billion in stolen USDT. circle froze $800 million in USDC. everyone's celebrating like the problem is solved

meanwhile the hacker deposited the stolen USDT on aave, borrowed ETH against it, and walked away. because USDT can be frozen. ETH can't

he's never paying it back. he doesn't need to

tether and circle just proved they can freeze billions in seconds. and the hacker just proved that if you know how defi actually works, none of that matters

the freeze saved some of the money. but the smartest money was already gone before anyone pressed the button

correction on the timeline:

the hacker deposited USDT into aave and borrowed ETH BEFORE tether and circle froze the tokens, not after. he front-ran the freeze, that's what made the move smart

once tokens are frozen at the contract level they can't move anywhere, i should have been clearer on that

the core point still holds. the hacker knew stablecoins could be frozen so he converted what he could to ETH through aave before the blacklist hit. tether and circle saved most of it but the hacker was already ahead

appreciate the corrections, this is how we all learn in real time

onchain data shows the hacker deposited $60M USDT into aave and borrowed ~19,762 ETH before the blacklist hit. the freeze caught the majority of the funds but $60M still walked out the door through defi