Cronos Blocks Entire Blockchain After $75 Million Tectonic Exploit

Cronos, the blockchain network operated by Crypto.com, halted all block production on Sunday after an exploit at Tectonic, its largest lending protocol. The attack is estimated to have resulted in a loss of around $75 million.

The exploit was attributed to a 'Mango-market style pump-and-borrow price manipulation attack,' where the attacker manipulated the price of TONIC's governance token, allowing them to borrow against it and siphon off funds. This led to a 100-fold surge in the token's price within 20 minutes.

Tectonic held around $121.7 million in deposits and $82.7 million in active loans shortly before the incident. However, after the halt, these figures collapsed to roughly $3 million, representing a 97.5% decline over 30 days.

Cronos' decision to halt the entire blockchain was made possible by its capped validator set of 100 validators, which allowed for swift coordination and containment of the attack. However, this move also froze all open loans, trades, payouts, and automated positions belonging to users who had no direct interaction with Tectonic.

Neither Cronos nor Tectonic has given a restart timeline or confirmed a final figure for the losses incurred during the exploit. The exchange and app operated normally, and customer funds were reportedly safe.