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Allbridge pauses cross-chain bridge after $1.65M exploit
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- DeepHorus
Allbridge, the company behind the cross-chain stablecoin bridge Allbridge Core, announced on Sunday that it had paused the protocol following a security incident that resulted in approximately $1.65 million being drained. The attacker exploited the Solana deployment of Allbridge Core, using a flash loan to manipulate the bridgeās stablecoin exchange rate and withdraw liquidity at an artificially favorable rate. The stolen funds were subsequently bridged from Solana to Ethereum and moved into privacy pools, making recovery more difficult.
The exploit is at least the sixth attack targeting a cross-chain bridge since May, underscoring the persistent vulnerabilities in these protocols. Bridges are attractive to attackers because they often hold large pools of funds that back bridged assets on destination blockchains. According to Onchain Lens, the attacker obtained a $1.12 million USDC flash loan from Kamino, then conducted rapid swaps between USDC and USDT, distorting the Allbridge Core stablecoin poolās exchange rate. After withdrawing liquidity at the manipulated rates, the attacker repaid the flash loan and kept the difference.
The incident has significant implications for the broader decentralized finance (DeFi) ecosystem, as cross-chain bridges remain critical infrastructure for interoperability. Allbridge urged liquidity providers to withdraw from affected pools immediately and called on the attacker to consider returning the funds. āThe resulting pool imbalance created a temporary positive arbitrage window. If you took advantage of it, please consider returning fundsā¦ this will go directly toward compensating affected LPs,ā the company stated in a post on X.
This is not the first time Allbridge has suffered a flash loan attack. In April 2023, the protocol was exploited for $573,000 on the BNB Chain through a similar manipulation of swap prices. That attack drained $289,900 in Binance USD (BUSD) and $290,900 in USDt (USDT). The repeated nature of these exploits raises concerns about the security measures employed by Allbridge and similar projects.
The broader trend of cross-chain bridge exploits continues to accelerate. In June, Taiko, an Ethereum layer-2 blockchain, suffered a $1.7 million exploit on one of its bridge protocols, leading to a temporary shutdown. Weeks earlier, Secret Network lost $4.67 million due to an āinfinite mintā bug. Other recent incidents include the Gravity Bridge, Verus Bridge, and Butter Network exploits, highlighting a systemic challenge across the industry.
Looking ahead, Allbridgeās response and recovery efforts will be closely monitored by the DeFi community. The protocol has paused operations while investigating, but no timeline for reopening has been provided. As cross-chain bridges remain essential for asset transfers between blockchains, the industry must prioritize robust security audits and real-time monitoring to prevent future attacks.
