Terra Blockchain has reported a security breach impacting the loss of hundreds of tokens.
On Wednesday, Terra Blockchain suffered a security breach that resulted in the loss of tokens worth millions. The Terra team updated the X community concerning the security breach and the damages caused by the Exploit.
Terra Suffers Security Breach
On X, Terra stated that an unidentified attacker compromised a vulnerable module called IBC, which is responsible for facilitating cross-chain contract calls and token movement.
The Terra team lamented that the criminals managed to weaken the vulnerable system to drain bridged assets such as USDC stablecoin and ASTRO tokens. The security breach was investigated by the renowned blockchain security firm Beosin to assess the severity of the Attack.
In their report, the Beosin team noted that the hackers escaped with $4 million worth of assets. Shortly after discovering the security concern, the Terra team took preventive measures to prevent the Attack from spreading.
Firstly, the Terra team issued a command to the validator to apply an emergency patch to address the security breach. The security breach attracted the attention of experts who wanted to identify the cause of the Attack.
Hackers Steal Millions Worth of Crypto From Terra Blockchain
A statement from the co-founder of Sommelier Protocol, Zaki Manian, reveals that the vulnerability was identified a few months ago and was addressed across the Cosmos ecosystem. In June, Terra upgraded the system but failed to include the patch.
Manian explained that the upgrade could not address the vulnerability, exposing the Terra blockchain to security threats. The executive noted that the hacker drained all the Axelar USDC on the Terra network by exploiting the IBC hook.
The security team noted that the hackers escaped with 60 million ASTRO tokens, 2.7 BTC, $3.5 million USDC, and $500 000 USDT stablecoin. From the investigation report, the Beosin team observed that the hackers deployed a malicious CosmWasm on the vulnerable hook.
LUNA and ASTRO Reacts to Terra Security Breach
The Terra team confirmed that it would resume the block production at 4:19 am (UTC), with its validators holding 67% of the voting power. The security team stated that the vulnerable nodes have been patched against any security breach.
The Attack triggered the ASTRO token plummet. Shortly after addressing the Attack, ASTR recovered from the slight dip, trading above $0.0003642, according to CoinMarketCap.
Subsequently, Terra native token LUNA fell below $0.396 in a day. The Terra blockchain was hard forked from the original Terra Classic that crashed in 2022 and wiped out $45 billion of crypto assets.
The collapse of Terra Classic was triggered by algorithmic stablecoin UST that lacked adequate collateral backing. Following Terra’s collapse, the former chief executive of Terraform Labs Do, Kwon, has faced several legal charges. In June, Do Kwon agreed to settle civil penalties amounting to $4.5 billion for the US Securities and Exchange Commission (SEC).
