Cronos suspended its blockchain network after a security breach in the decentralized finance protocol Tectonic resulted in an estimated $75 million loss. Most of the funds remain on the Cronos network as of the latest assessment.
The exploit was identified on Sunday, leading Cronos to halt the network and commit to providing updates. Tectonic separately advised users to avoid interacting with the protocol while its investigation continued. Neither project has disclosed the cause of the breach or the total confirmed loss, and no timeline for resuming operations has been announced.
Researcher Weilin Li attributed the attack to a pump-and-borrow scheme targeting Tectonic’s governance token, TONIC. The attacker exploited a 20% collateral factor and low liquidity to inflate TONIC’s price 100-fold within 20 minutes, enabling the borrowing of additional assets. Li initially estimated the loss at $66 million, noting that approximately $6 million was bridged to Ethereum before the network halt, leaving $60 million on Cronos. A subsequent analysis identified another address linked to the attacker holding roughly $8 million, bringing the total estimated loss to $75 million.
Crypto.com CEO Kris Marszalek confirmed that the company’s exchange and app remained operational and unaffected, with user funds secure. Neither Cronos nor Tectonic has indicated whether measures will be taken to freeze attacker-controlled addresses, recover assets, or compensate affected users. Cointelegraph has sought comment from all parties involved.
The incident follows recent high-profile DeFi exploits, underscoring ongoing vulnerabilities in decentralized lending protocols.
