Cronos Network Suspended After Attack on Lending Protocol Tectonic

The Cronos network has been temporarily suspended due to an attack on the lending protocol Tectonic. According to a statement from Cronos Network, they have identified a vulnerability in Tectonic and have paused the network as a precautionary measure. Tectonic has also confirmed that it is investigating the incident and advising users not to interact with the protocol until further notice.

According to data from DefiLlama, Tectonic had approximately $121.7 million locked up in value before the attack, with around $82.7 million in active loans.

Weilin Li, a blockchain researcher, has attributed the attack to price manipulation of the TONIC token. The attacker allegedly bought up sufficient amounts of TONIC within 20 minutes to increase its price by around 100 times, and then used this artificially inflated value as collateral to borrow other assets from Tectonic.

Li initially estimated that the attackers made a profit of around $66 million, but later discovered another address controlled by the attacker with an additional $8 million, bringing the total estimated loss to around $75 million. However, it appears that only around $6 million was successfully bridged to Ethereum, and the Cronos network's temporary shutdown prevented most of the affected assets from being transferred out.