On October 6, 2020, the PARSIQ team reached out to Poloniex notifying us that PARSIQ tokens (PRQ) were stolen by an attacker on another exchange. The PARSIQ team outlined their plan to recover the stolen assets by deploying a new token contract and issuing PRQ tokens 1:1 based on a network snapshot. Upon receiving this information from their team, Poloniex disabled PRQ deposits and withdrawals in order to prevent the spread of stolen funds.
Despite Poloniex placing a freeze on PRQ deposits, the lack of a pause function on the PRQ token contract allowed a small number of Poloniex users to credit their account with pre-swap PRQ tokens. At the time of the network snapshot (October 7, 2020 at 13:05:28 UTC), we had not yet frozen our PRQ/USDT market. This meant that some users could deposit pre-swap PRQ tokens, trade into USDT, and withdraw funds, leaving buyers with pre-swap PRQ tokens that were not eligible for the token swap.
We have identified the users who were able to deposit PRQ into Poloniex after snapshot and have implemented a plan to recover assets for users that purchased pre-swap PRQ tokens after the PARSIQ network snapshot. In cases where we were able to reverse trades without negatively impacting the trade counterparty, we did so and have issued a USDT credit to purchasers.
In addition, we have distributed the PRQ for the new token contract to all of our eligible users that held PRQ at the time of our snapshot. We have now re-enabled our PRQ wallet using the new token contract and re-opened the PRQ/USDT market in post-only mode. We are addressing the issue that allowed a small number of users to credit their accounts with PRQ. With token swaps becoming more and more common, we are continuing to improve our internal processes moving forward.