Bitcoin DeFi protocol loses $8M in exploit, launches compensation program

In another example of how some exploited crypto projects strive to compensate their affected users, a bitcoin-powered decentralized finance (DeFi) project has announced a program to support users after a multimillion-dollar exploit.

On Sunday, the team behind Alex Protocol detailed its Treasury Grant Program, meant to compensate users after the protocol was exploited this past Friday to the tune of around $8.4 million.

The exploiter managed to drain several types of tokens, such as stacks (STX), stablecoins, and tokenized versions of bitcoin (BTC), from the protocol's liquidity pools, where users contribute their funds to provide liquidity and be rewarded in return.

The team claims that, using the Alex Lab Foundation treasury, they will cover 100% of each affected user's loss, paid in the USD coin (USDC) stablecoin.

"To calculate each reimbursement, we will use the average of on-chain exchange rates taken between 10:00 UTC and 14:00 UTC on June 6th, 2025," they said, adding that users need to complete the claim form and confirm their receiving wallet address by June 10th, 23:59 UTC.

The funds are promised to be distributed within seven days after the claim. Meanwhile, as scammers often try to trick victims by pretending to be the affected project and later stealing their funds, Alex reminds users to stay cautious and use only the official website of the project to submit their claim.

"Do not connect to any other sites or apps; do not trust anyone offering 'to help,' providing a Zoom link, or asking for remote access. Do not share or enter your seed phrase on any site. Even on official ALEX channels, ensure you verify their username with official tags for authenticity," they warned.

While a more detailed post-mortem of the attack is yet to be announced, the team said it was exploited via a flaw in the self-listing verification logic, somewhat blaming their underlying blockchain Stacks (STX), which is one of the most popular so-called itcoin Layer 2 platforms.

However, commenters were quick to dismiss the accusation, stressing that Alex's smart contract design is to blame, as "self-listing logic can be (and has been) implemented without exploit."

Meanwhile, in a related story previously reported by Cybernews.com, another recently exploited DeFi protocol, Cetus, got support from the community of its underlying blockchain Sui (SUI), as the vote to repay $162 million to Cetus exploit victims has been successfully passed.