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Terra Can’t Catch a Break as Blockchain Gets $6 Million Exploited
The attack, which exploited a vulnerability disclosed in April, drained around 60 million ASTRO tokens, sending the price plummeting.
The Terra blockchain has been exploited for over $6 million, forcing developers to take a momentary break the chain.
Beosin Cyber Security Company reported that the protocol lost 60 million ASTRO tokens, 3.5 million USDC, 500,000 USDT, and 2.7 BTC or $180,000.
Terra developers paused the chain on Wednesday morning to apply an emergency patch that would address the attack. Moments later, a 67% majority of validators upgraded their nodes and resumed block production.
The ASTRO token has plunged as much as 75%. It is now trading at $0.03, a 25% decline on the day. Traders who took advantage of the drop are now on 195%.
The vulnerability that took down the Cosmos-based blockchain was disclosed in April and involved the deployment of a malicious CosmWasm contract. It opened the door to attacks via what is called an “ibc-hooks callback timeout reentrancy vulnerability,” which is used to invoke contracts and enable cross-chain swaps.
Terra 2.0 also suffered a massive drop in total value locked (TVL) in April, shortly after the vulnerability was discovered. It plunged 80% to $6 million from $30 million in TVL and has since lost nearly half of that value, currently sitting at $3.9 million.
The current Earth chain emerged from the rubble as a hard fork after the original blockchain, now called Terra Classic, collapsed in 2022. Terra collapsed after its algorithmic stablecoin (UST) lost its peg, causing a run on deposits. More than $50 billion of UST’s market cap was wiped out in a matter of days.
Terraform Labs, the company behind the blockchain, has been slowly unravelling its legal woes since its mid-2022 crash. Founder Do Kwon awaits sentencing in Montenegro after he and his company were found liable for $40 billion in customer funds in early April.
On June 12, Terraform Labs settled with the SEC for $4.4 billion, for which the company will pay about $3.59 billion plus interest and a $420 million penalty. Meanwhile, Kwon will pay $204.3 million, including $110 million in restitution, interest and an $80 million penalty, a court filing showed.