December 7, 2023

The Nomad cross-bridge suffered an exploit on Monday, August 1st, with attackers depleting the protocol of nearly all of its funds. The total value of cryptocurrencies lost in the attack totaled nearly $200 million. Hundreds of potential exploiters, including white hat hackers intent on returning funds, managed to remove all of the bridge’s Total Locked Value (TVL) in just a few hours.

This attack is the latest in a series of highly publicized incidents calling into question the security of cross-chain bridges. Nomad, like other cross-chain bridges, allows its users to send and receive tokens between different blockchains. Almost all of the $190.7 million in cryptocurrency has been removed from the bridge, with only $651.54 remaining in the wallet according to decentralized financial tracking platform DeFi Llama. However, Nomad has suggested that some of the funds were withdrawn by white hat hackers in order to keep them safe. The Nomad team confirmed its exploit CoinDesk in a statement stating,

The research is ongoing and the leading companies in blockchain intelligence and forensics have been retained. We have notified law enforcement and are working around the clock to address the situation and provide timely updates. Our goal is to trace the accounts involved and trace and recover the funds.

The first transaction deemed suspicious that may have been the genesis of the ongoing exploit came at 9:32 p.m. UTC when someone managed to remove 100 Wrapped Bitcoin (WBTC) worth about $2.3 million from the bridge. Shortly after, the community raised the alarm about the potential exploit, and the Nomad team confirmed at 11:35 UTC that they were aware of the “incident involving the Nomad token bridge” adding that they are “currently investigating the incident.”

So far, one person has come forward as a white hat hacker who intends to return the funds he took from the bridge. The person goes by “Notify Bot” on Twitter and said:

This is a whitehack. I intend to return the funds. Awaiting official communication from Nomad team (provide an email id to contact). I have not traded any assets even after knowing that USDC may freeze. Transferred USD…

The tokens were obtained in a very unusual manner, as each was struck in nearly equivalent denominations. For example, trades with exactly 202,440.725413 USDC were executed over 200 times. The incident also received WBTC, Wrapped Ether, USD Coin, TRAx, Covalent Query Token, Hummingbird Governance Token, IAGON, Dai, GeroWallet, Card Starter, Saddle DAO and Charli3 tokens from the bridge.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial or other advice.

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