Once Terra blockchain discovered the attack, the team launched emergency measures to contain the situation. This helped prevent further damage and ensure that more tokens are not siphoned.
Terra blockchain has come under attack and the perpetrator made away with several tokens. Markedly, the network took to X to notify its users of the security breach by an unknown hacker, confirming the theft of tokens.
According to Terra, the scammer exploited a known vulnerability that is linked with a third-party module called IBC hooks. The module is responsible for cross-chain contract calls and token movement.
Terra Contains Scammer Attack
With the IBC hook-associated vulnerability, the bad actor successfully drained value from bridged assets. This includes USDC stablecoin and Astroport tokens running to the tune of more than $3 million.
📣Attention Terra users: Please be advised that the chain will be halted shortly at block height 11430400 and transactions will not be processed during this time.
We will be working with the validators on Terra (phoenix-1) to apply an emergency patch thereafter to remediate a…
— Terra 🌍 Powered by LUNA 🌕 (@terra_money) July 31, 2024
Once Terra blockchain discovered the attack, the team launched emergency measures to contain the situation. This helped prevent further damage and ensure that more tokens are not siphoned.
Terra achieved this coordination in collaboration with its validators. Together, they applied an emergency patch to remediate the suspected exploit. However, it first informed users of the suspension of the chain at block height 11430400 and transactions came to a halt during this time.
“We will be working with the validators on Terra to apply an emergency patch thereafter to remediate a suspected exploit,” Terra blockchain wrote on X.
This vulnerability first came to light a few months back after which it went across the Cosmos ecosystem in April. An upgrade on the Terra blockchain took place in June but failed to consider the vulnerability patch. In an explanation offered by Zaki Manian, co-founder of Sommelier Finance, this relegation contributed to increased exposure and inevitably, the latest attack.
“There was a vulnerability in IBC hooks discovered by Composable Finance in April. It was patched across Cosmos. Terra was patched then,” Manian explained. “It appears that Terra’s June upgrade did not include the patch. All the Axelar USDC bridged to Terra was stolen using the IBC hooks exploit. A large amount of ASTRO was also stolen.”
LUNA Price Drops amidst Exploit
Unfortunately, the native token of the network Terra (LUNA) registered a price dip following the news of the exploit. At the time of writing, LUNA traded at $0.3946, corresponding with a 3.37% decrease in 24 hours and a 7.47% dip in the last 7 days.
It is worth noting that this breach comes two years after the Terra blockchain experienced a massive collapse that sent the entire crypto industry down by $2 trillion. However, since that time till now, Terra has made some notable changes including the hard fork from the Terra Classic network.
Noteworthy, Terraform Labs is still dealing with its bankruptcy and recently released the date for creditors to submit their claims. The company set August 9, 2024, at 5:00 p.m. (ET) as the General Bar Date.
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