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Cronos validators halted block production on August 30 after an exploit hit lending protocol Tectonic, with on-chain researcher Weilin Li estimating that roughly $75 million in assets were affected.
Most of the suspected proceeds remain on Cronos after the network stopped before they could be moved elsewhere. Tectonic has not confirmed the final loss or root cause and has told users not to interact with the protocol while its investigation continues.
Researcher Traces Exploit to 100-Fold TONIC Price Spike
Li traced the incident to manipulation of TONIC, Tectonic’s thinly traded governance token. The attacker reportedly pushed its price roughly 100-fold within about 20 minutes before depositing the inflated tokens as collateral and borrowing other assets.
TONIC had a 20% collateral factor on Tectonic, allowing borrowers to draw assets worth up to one-fifth of the collateral value recognized by the protocol.
Li initially estimated about $66 million was impacted before identifying another attacker-controlled address holding roughly $8 million, taking his estimate to around $75 million. The figure remains preliminary.
About $6M Reached Ethereum Before Cronos Stopped
Around $6 million of the suspected proceeds reached Ethereum before Cronos validators halted the network, according to Li’s analysis. Most of the remaining assets are still on Cronos.
Tectonic had about $121.7 million in total value locked on August 26. Reported TVL had fallen to roughly $3 million by Monday following the exploit and network halt.
Crypto.com Says Customer Funds Were Unaffected
Crypto.com CEO Kris Marszalek said the company’s app and exchange were not compromised and continued operating normally. Crypto.com’s security team is assisting Cronos with the investigation.
Cronos had not announced a timetable for restarting block production by Monday morning. Tectonic has also yet to confirm the exploit mechanism, final losses or amounts owed to affected depositors.
