Quick Breakdown
- Shiba Inu’s K9 Finance offered a 5 ETH bounty to the attacker if stolen funds are returned.
- The exploit drained $2.4M after attackers gained validator control using BONE tokens.
- SHIB, KNINE, and BONE tokens saw significant price drops following the breach.
Bounty offer to attacker
Shiba Inu’s decentralized finance platform, K9 Finance, operating on the Shibarium layer-2 network, has extended a 5 Ether ($23,000) bounty to the hacker behind a recent bridge exploit. The protocol made the offer via an onchain message on Monday, stating that the bounty will remain open for 30 days, though it will begin to reduce after seven days.
“Settlement is atomic when we call recoverKnine(). If you call accept() we cannot cancel the deal. Code is law,”
K9 Finance noted in the message, urging the attacker to act quickly.
Details of the exploit
The incident occurred on Saturday, draining $2.4 million in digital assets from the platform. According to Shiba Inu developer Kaal Dhairya, the breach stemmed from compromised validator signing keys. The attacker reportedly used a flash loan to acquire 4.6 million Bone ShibaSwap (BONE) tokens, securing majority validator power and signing a malicious transaction to siphon funds from the bridge.
In response, Shibarium developers have paused staking and unstaking functions and shifted stake manager funds into a multisig-controlled hardware wallet for added security.
Security measures and market impact
Dhairya emphasized that safeguarding user funds and restoring the network’s integrity remain the top priorities. The team has enlisted security firms, including Hexens, Seal 911, and PeckShield, to assist in the investigation. Authorities have also been contacted, though Dhairya stressed they remain open to negotiating with the attacker.
The exploit triggered sharp price declines across the Shiba Inu ecosystem. SHIB fell 7% from $0.0000145 to $0.0000131, K9 Finance (KNINE) dropped 10% from $0.00000287 to $0.00000257, while BONE plunged 38% to $0.19 according to CoinGecko data.
This breach follows another incident last week in which THORChain co-founder John-Paul Thorbjornsen (JP Thor) had his personal wallet drained after a Telegram meeting call scam, according to onchain investigator ZachXBT.
Notably, ShibaSwap successfully migrated to the Shibarium blockchain in May, a move expected to enhance its users’ trading experience.
If you would like to read more articles like this, visit DeFi Planet and follow us on Twitter, LinkedIn, Facebook, Instagram, and CoinMarketCap Community.
Take control of your crypto portfolio with MARKETS PRO, DeFi Planet’s suite of analytics tools.”
