Cronos halts its blockchain after a suspected $75M Tectonic exploit, with most funds reportedly stranded on the network.
The team behind the Cronos blockchain has halted the network after an exploit targeting Tectonic, its largest decentralised lending protocol, with the suspected exploit estimated at around $75 million.
The incident began on 30 August when an attacker allegedly manipulated the price of Tectonic’s governance token, TONIC. The token’s price surged roughly 100-fold within 20 minutes and was reportedly used as collateral to borrow higher-value assets from the lending protocol.
An on-chain researcher known as Weilin Li described the attack as similar to the 2022 Mango Markets exploit, in which an attacker manipulated an asset’s market price before using the inflated value to borrow funds. TONIC reportedly had around $1.34 million in liquidity and a 20% collateral factor on Tectonic, creating the conditions for the alleged manipulation.
Li initially put the affected assets at around $66 million before identifying another attacker-controlled address containing approximately $8 million, bringing the estimate to roughly $75 million. Neither Tectonic nor Cronos has independently confirmed the final amount or published a full post-mortem.
Cronos moved to halt block production across the entire network after detecting the exploit. Only around $6 million of the suspected proceeds reportedly reached Ethereum before the halt, leaving most of the funds stranded on Cronos. The shutdown also affected users and applications unrelated to Tectonic, as transactions across the network could no longer be processed.
The exploit has had a significant impact on Tectonic’s total value locked (TVL). The protocol held around $121.7 million in TVL before the incident, but the figure had fallen to approximately $3 million by Monday, according to DeFiLlama.
Crypto.com CEO Kris Marszalek said in a tweet that the “Cronos team is investigating, with assistance from Crypto.com security team,” and that the “Crypto.com app and exchange were not affected and are operating as usual. All funds are safe.”
Cronos and Tectonic had not announced when the blockchain would resume operations or how the remaining funds linked to the attack would be handled. The incident remains under investigation.
Stay updated on crypto and AI by following our socials
