‘SEAL 911’ Team of White Hats Formed to Fight Crypto Hacking in Real Time

In August 2022, an exploit or flaw was discovered in the bridge, which began with a $190 million nomadic heist, and a large number of criminals entered to steal the money.

That's one problem with Emunifi's analysis of the exploit: “Staying true to DeFi principles, this hack was permissionless – anyone could join.

Many white hat hackers wanted to help but were forced to watch from the sidelines due to the legal risks involved.

Back in February, famous white hat hacker Samczsun later marveled at the security community: “We got to a point where random people felt comfortable stealing money on the bridge, but white hats felt too dangerous to intervene.”

Something had to be done. Paradigm's head of security, Samson, decided to light up the SEAL911 bat symbol at night for future hacks so the White Helmets could help fight hacks. But first, the legal issues must be addressed.

Seal: A security alliance of white hat hackers

The idea of ​​the Security Alliance (SEAL) has emerged and the project will officially launch on February 14. SEAL 911 is a hot desk at Telegram's messaging service, a team of about 40 white hat hackers who can retrieve reports of hacks in progress and access reports of databases in progress. At the same time.

Samczsun calls it a “firefighting helicopter,” adding that “crypto as an industry is taking security seriously.”

“The idea is that if someone finds a critical error but doesn't know who to talk to in the project team […] That's one of the things SEAL911 can help with. Then we can help with the hacking response, obviously.

But the sheer number of hacks that happen every day is a big job for a few dozen hackers, no matter how good they are.

“It's an extremely large demand, part of which, for now, is a manageable size. We want to serve all crypto. We may be divided into groups, but now the groups are small because we are dealing with very sensitive information.

In addition to white hats, there are auditors, bug bounty program coordinators, and investigative sleuths. Ethereum creator Vitalik Buterin was the first donor, donating 250 ETH to get things started, and various Web2 and Web3 companies, along with VCs, provided funding.

The emergency hotline is one of three separate initiatives from SEAL to try and help the crypto industry with these ongoing issues. He also helped Wargames develop strategies to deal with fake attacks and drafted the White Hats' Safe Harbor legal agreement, which is designed to protect the good guys from liability if things get hairy when trying to fix a recent or ongoing criminal hack. Despite his attempts to help so far, getting into legal trouble is a constant concern.

“Eventually if I screw up what I'm doing, I'm only human – am I on the hook for it? Am I accidentally missing 7, 8, 9 TVL images?”

Register protocols, letting the white hats know to which address they should transfer the stolen funds and what kind of bonus they will receive.

The SEAL prototype was launched in 2022 with a handful of volunteers, and the first reported rescue occurred in September 2023, when the associated White Helmets volunteered to stop a smart contract thief exposed to Dec9win and saved $200,000. Now the capacity of the organization has increased.

Who is the white hat hacker Samczsun?

Samczsun is in many ways the poster child for crypto. It is a firm believer in decentralization and anonymity. He is always behind an anime avatar using voice acting when helping the FBI or other law enforcement agencies. When I asked to record the interview, we had to pause for him to set up the audio editing.

A well-known personality in crypto, he chose to express his status as an influencer to create SEAL.

“Really, SEAL is built on me being a successful White Hat,” he says.

Which begs the question: as a sh*t hot hacker, why not just steal the money yourself?

“I've had this a lot. The easiest way to put it is, I've seen what it's like to be a hacked person. I've seen people fall victim to spy contract hacks, I've seen people fall victim to personal hacks. It hurts to hear them talk about losing their life savings or what little money they've saved to build a better future for their children. It hurts so much. I can't do that. I can't put that much suffering on so many people.

He looks so real. The first thing he says when we talk is: “By the way, did you know you have an impersonator on Twitter (X)?”

Since then I have found that it is very difficult to remove the impersonator on the X.

Support for the white hat hacker SEAL team flows

The input from the crypto community and over 75 affiliated organizations has helped give SEAL credibility and respect.

Buterin's 250 ETH donation was followed by funding from Ethereum Foundation, a16z crypto, Framework, Dragonfly, Electric Capital and Paradigm. There was also support from independent crypto participants who benefited from more secure protocols and DApps.

SEAL is a legally registered 501c3 in the US and has a management team and an independent board of directors. The idea is to build an organization that can continue without Samsung if necessary.

Safe Harbor Agreement

For SEAL to succeed, Samczsun explains, it needs to address the problem of legal liability.

“In the last three, four years, I've been — every live hack — I've made it clear that I'm not going to be the one to hit the button to save the transaction or fix the error, because I don't know. What does that mean for me as far as accountability?

So, the SEAL came up with the crypto equivalent of Good Samaritan laws — laws that give legal protection to people who administer the Heimlich maneuver to a choking person from being sued if they accidentally break some ribs.

The transparent and transparent nature of the blockchain means that it is often very obvious when a hack occurs, meaning that white hats can front-end the hack and return the funds to their owners.

“If the white hats can find out about these hackers being killed, why don't we empower them to jump in and do something about it?”

In mid-February, SEAL released the Safe Harbor Agreement (SHA) for comment. White Hat aims to protect hackers from wrongful prosecution and provide legal transparency around their actions if they intervene in a hack. The agreement is between the hacked protocol and the white hat rescue and gives them a safe haven to hop and skip funds to a safe recovery address instead of the attacker's wallet address.

Crypto-native lawyers helped draft the Safe Harbor Agreement.

The “Lexpunk Army” – an activist group of crypto native lawyers – played an important role in preparing the agreement. “Charm,” the LexPunk contributor who led to SHA's completion, said it was important to come up with a crypto-specific agreement because “legal systems don't handle innovation very well.”

Many computer protection laws in the US date back to the Reagan administration and hacking issues from the 1980s. “The agreement is based on a very broad concept of consent that all parties involved can give. But it was very difficult to get access to the money and smart contract code,” he said.

For white hats, the sticking point in negotiating the deal is: Should there be a specific category list that white hats are allowed to take?

In the end, the Safe Harbor agreement effectively became an “open list,” Charm tells the magazine.

The agreement contemplates endless scenarios and provides ways for white hat hackers to make money using a list of actions they can take. There is a whole section on the terms of engagement that can lead to bot hacks.

It was a comprehensive attempt to close every legal issue, with multiple rounds of review.

Charm acknowledges criticism of the SEALs' ability to handle large numbers of hacks, but says the Safe Harbor agreement is a tool and best practice guide for any white hat outfit, both inside and outside of the SEALs.

Miles Jennings, general counsel at a16z crypto, said the document's intelligence could actually work. “Trying to solve an incredibly complex problem is interesting. And if you don't solve one problem, you'll make it worse.

“Especially, we have not been able to eradicate the black hats. For example, you cannot consent to criminal activity, for example, a user cannot consent to market manipulation. Therefore, the agreement should have addressed these issues.

The SEAL interest was revealed to Jennings during the Nomadic hijacking when he prevented the a16z security team from entering.

I had to be the bad guy saying, “No, we can't take that risk.” You're not legally allowed to engage in that activity, so criminal liability comes with it. Maybe there are funds we can get, but I'm not going to risk that.

He said the SHA is “clear about what hacking and white hat activities are not allowed” and includes a list specifically for white hats in clear and understandable language.

But he admits that it ultimately comes down to whether the parties accept it and use it in good faith.

“It's all very complicated, it's high risk, success is by no means guaranteed, but it's still the most important step for the growing whole ecosystem of disease prevention in terms of white hats.”

The hacks are getting more complicated, but the SEALs can win.

The protocols are getting bigger, the equations are getting longer, and the hacks are getting progressively better. According to Samczsun, actual hacks like the Kyber hack of November 2023 are based on calculations that only happen under certain circumstances.

“Hacks have definitely gotten more complex. When I first started, the code was simple. In elementary school, you were doing addition, subtraction, multiplication, and division. The hacks were educational in that they gave you a simple question. For us, trying to find a bug was like this: What's three plus four? Then We went to algebra and calculus, quadratics, and now we're doing quadratics and exponentials.

However, Samczsun is hopeful that SEAL can win. “Now it's the equivalent of taking a college-level course on quadratic equations. So things are getting harder, but it's a good sign that we're forcing hackers to solve more complex problems. One day we will bring a problem that they cannot solve. It's just a matter of time.”

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Max Parasol has worked as a crypto and AI researcher at the RMIT Blockchain Innovation Hub, as a lawyer, in private equity and as part of an ambitious early stage crypto startup.

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