Suspected malicious actors allegedly minted 1 Billion tokens worth $14.4 million by exploiting Omnichain tokenization protocol Holograph’s operator contract, leading to a 50% drop in value for its native token HLG.
The hack, confirmed by Holograph’s X account on June 14, prompted immediate action to patch the exploit and collaborate with crypto exchanges to freeze the hacker’s accounts. The company has initiated its investigation and is engaging law enforcement.
The exploit unfolded through nine transactions, starting on June 13 at 9:47 am UTC, exploiting a smart contract vulnerability, as per Etherscan data. The hacker minted 1 billion HLG tokens across seven 100 million token batches.
The repercussions were swift as HLG’s price plummeted within ten minutes, reaching a local low of $0.0029 from $0.014. HLG’s market cap also tumbled from nearly $22 million to $4.8 million, according to CoinMarketCap data.
As of now, HLG has slightly recovered to $0.008, valuing the hacked tokens at $7.4 million. The hacker quickly began converting the minted HLG into stablecoin Tether, compounding the damage.
Matt Casto, a cryptocurrency researcher at CMT Digital, speculates that the hacker might have been a “rogue dev” who funded Holograph’s operator contract address weeks prior. The holograph has not disclosed the hacker’s identity.
Holograph, part of the Omnichain ecosystem, facilitates cross-chain token movements with consistent contract addresses. It has received venture capital backing from Animoca Brands and Mechanism Capital.
This incident adds to the ongoing challenges in the crypto space, with Crystal Intelligence reporting nearly $19 billion in cryptocurrency theft since the first hack in June 2011.
Recent hacking attempts and cyber attacks by malicious actors show the inherent risks and loopholes associated with blockchain ecosystem however the swift response and collaboration by Holograph following demonstrate proactive measures to safeguard user assets.
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