Omnichain tokenization platform Holograph’s native token, HLG, fell nearly 80% in value following a recent hack.
The malicious actor exploited a vulnerability in the protocol’s operator contract, minting 1 billion HLG tokens that were initially valued at approximately $14.4 million.
The Holograph Exploit
Holograph confirmed the breach on their X account, assuring users that the initial exploit has been patched and efforts are underway with cryptocurrency exchange partners to freeze the hacker’s accounts.
The Holograph Operator contract has been exploited by a malicious actor, enabling the hacker to mint 1 billion additional HLG
The team has patched the initial exploit & is working with exchange partners to lock the malicious accounts
The team has launched an investigation & is…
— Holograph (@holographxyz) June 13, 2024
They added that the team has launched an investigation and is in the process of contacting law enforcement.
According to data from Etherscan, the breach began on June 13 at 9:47 am UTC, when the attacker used a smart contract vulnerability to mint the tokens in nine transactions. Seven of these transactions involved batches of 100 million tokens each.
Initially worth $14.4 million, the hacker began converting the newly minted HLG into the stablecoin Tether just four hours after the exploit. At present market values, the 1 billion HLG tokens taken by the exploiter are valued at just over $7 million.
The token’s price dropped in value just 10 minutes after the attack started. Within nine hours, HLG’s value fell from $0.014 to a low of $0.0029, marking a 79.4% decline. During this period, HLG’s market capitalization also dropped from nearly $22 million to $4.8 million.
In the aftermath of the attack, the token has managed a slight recovery.
On-Chain Data Points to Rogue Developer
On-chain data has identified the ENS wallet acc01ade.eth as being involved in the exploit. Matt Casto, a cryptocurrency researcher at venture capital firm CMT Digital, suggested that the hacker might be a “rogue dev” who had prepared for the attack nearly a month in advance.
“Looks like a rogue dev who funded the address 26 days ago. That address was the one who received the minted supply,” Casto stated.
According to its website, the Holograph Protocol operates within the Omnichain ecosystem, which aims to ensure consistent tokenization, seamless interoperability, and secure cross-chain asset transfers across all EVM blockchains.