The Cronos network has been paused following an exploit on the decentralized lending protocol Tectonic, which potentially puts up to $75 million in cryptocurrency at risk. The attack, identified on Sunday, involved a price manipulation of the TONIC governance token, allowing the hacker to borrow other assets after artificially inflating TONIC’s value by over 100 times in 20 minutes. Blockchain expert Weilin Li noted the attacker transferred $6 million to Ethereum before the halt, with a second hacker wallet containing $8 million. Crypto.com CEO Kris Marszalek confirmed its app and exchange were not affected, and user funds remain safe.
Cronos network has been forced to pause operations due to an exploit on the decentralized lending protocol Tectonic, reportedly putting approximately $75 million worth of cryptocurrencies at stake. Both projects announced the halt on Sunday, with Tectonic itself advising users to stop using its platform until further notice. Neither project has clarified the exact cause of the exploit or the precise amount involved.
Blockchain expert Weilin Li noted the hacker exploited the fact that Tectonic’s collateral factor for the TONIC governance token is 20%, combined with its limited liquidity. Li explained that the hacker increased TONIC’s price by more than 100 times in just 20 minutes, then borrowed other crypto assets against the inflated value. This method, according to Li, is similar to the approach used in the Mango Markets attack.
“It seems Tectonic has been exploited for around $66 million!” Li stated, adding that the root cause was simple. Li later found a second hacker wallet containing $8 million, raising the total estimated sum involved to approximately $75 million. The hacker managed to transfer $6 million to the Ethereum network before the Cronos network was halted.
Kris Marszalek, CEO of Crypto.com, said the hack had no relation to Crypto.com’s app or exchange. “Crypto.com app and exchange were not affected and are operating as usual. All funds are safe,” he stated. The investigation remains underway, with assistance from Crypto.com’s security team.
Neither Cronos network nor Tectonic has confirmed plans to block hacker wallets, recover lost assets, or compensate victims. No timeline has been provided for restarting the Cronos network, and the total amount lost remains unverified.
