Decentralized restaking protocol Zoth has fallen victim to a major security breach, resulting in a loss of approximately $8.4 million.
The exploit, which was flagged by blockchain security firm Cyvers Alerts, stemmed from a compromised deployer wallet, enabling the attacker to execute suspicious transactions.
Cyvers’s report indicates that the breach was facilitated through an upgrade to a proxy contract labelled “USD0PPSubVaultUpgradeable.” This upgrade, executed just 30 minutes before the attack, was traced back to a contract associated with the suspected hacker. Following the breach, an estimated $8.4 million in stablecoin USD0++ was withdrawn and swiftly converted into DAI before being moved to another address.
In response to the attack, Zoth’s website was taken down for maintenance, with the team acknowledging the security incident in a public statement.
“We are working closely with our partners to mitigate the impact and fully resolve the issue. A detailed report will be shared once the investigation is complete,”
the protocol stated.
Zoth, founded in January 2023 by Pritam Dutta and Koushik Bhargav, has attracted significant backing from investors. In August 2024, the project secured $4 million in funding to support the launch of its tokenized liquid note, a product backed by U.S. Treasury Bills and high-rated corporate bonds.
The funding round included participation from Taisu Ventures, G20, Fat Cat Ventures, and GemHead Capital, along with key investors from Coinbase and Hedera, as well as a grant from Ripple’s XRPL Foundation. With the platform’s community on high alert, further updates are expected as investigations into the breach continue.
The incident follows another major exploit in the crypto space, as Infini, a stablecoin digital bank, also fell victim to a security breach. Christian Li, the company’s founder, reached out to the hacker responsible for draining $49.5 million from its wallets, offering a white-hat agreement in an attempt to recover the stolen funds.
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