Euler’s Head of Risk resigns saying ‘not much I can help them with’
Seraphim Czecher quits Euler just weeks after a $197 million heist that was later returned by the attacker.
The Head of Risk at Euler, Seraphim Czecher, announced his resignation, adding, “There is not much I can help them with at this stage.”
In a tweet posted on April 20, he alluded to a loss of faith in the protocol following a recent attack — Czecher said, considering the circumstances, resigning is the right thing to do.
“Given the state of the protocol after the hack, I decided it’s the best time to move on.”
Euler exploited for $197 million
On March 13, hackers executed several flash loan attacks on the permissionless lending and borrowing platform — extracting $197 million in DAI, USDC, WBTC, and stETH.
A flash loan is the uncollateralized borrowing of cryptocurrency which requires quick repayment. This DeFi trading function is typically used by advanced traders looking to profit from arbitrage opportunities.
Flash loan attacks typically involve the attacker borrowing large sums of cryptocurrency via the flash loan, then using the whale status bestowed by the funds to manipulate the market in their favor.
However, in this case, according to Chainalysis, the attacker directly exploited a weakness in Euler’s flash loan protocol that balanced tokens representing collateral (eTokens) with tokens representing debt (dTokens).
“The hack was made possible by a liquidity issue in the DonateToReserve function of the eToken. This function was properly burning eTokens, but not dTokens, leading to an incorrect conversion of borrowed assets to collateralized assets.”
The attacker returns the funds
On April 4, after successful negotiations with the attacker, Euler announced it had recovered the funds — calling it “one the largest recoveries in DeFi history.”
The organization said this was made possible by the community-led sleuthing that eventually outed the attacker’s identity.
“While the attack itself showed a level of sophistication it quickly became clear the attacker had made a potentially life-changing mistake.”
The Euler community overwhelmingly praised the efforts taken to reclaim the stolen funds — with many expressing optimism about the protocol’s future.
However, approaching three weeks after this announcement, Czecher resigned from his position as Head of Risk — adding that, before the hack, he was already thinking about quitting.
However, post-hack, Czecher said feels he has little to offer the protocol — which catalyzed his decision to leave.
“But it is obvious that Euler will need to rethink what they will do next and for a growth person like me there isn’t much to contribute with.“
He intends to move to another DeFi project but wished Euler good luck.