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Crypto Bailouts Risk Becoming Cost of Doing Business for VCs

  • Sky Mavis, Wormhole saw losses met by investors after hacks
  • ‘These are realities,’ says exec at Wormhole backer Jump
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Hacks and scams have long been part of the fabric of doing business in crypto. Is it time for the sector’s venture capitalist backers to start assuming they should expect to cover the losses?

High-profile attacks on the crypto “bridges” that support key activities, like transferring tokens from one blockchain to another or playing the popular game Axie Infinity, have siphoned off more than $1 billion to date. When customers need repaying, recent incidents have shown those platforms’ operators are turning to their wealthy investors for aid — a trend that perhaps signals a new chapter in tech dealmaking.