Osmosis allBTC Token Exposes Shared Liability Risk

A recent issue on the Osmosis exchange has exposed the risk of shared liability in pooled tokens. Since September 9, 2026, holders of the allBTC token have been aware that their Bitcoin backing was overstated by around 36 percent. The shortfall is caused by a flaw in Nomic's forwarding mechanism, which allowed multiple vouchers to be generated from a single deposit and sent to Osmosis for exchange into properly backed holdings.

The issue affects around 2.67 million euros worth of allBTC tokens, according to our survey on September 11, 2026. The shortfall is due to the fact that one version of the bridge token, Nomic's nBTC, was not fully backed by real Bitcoin at the time of the deposit.

As a result, holders of allBTC are exposed to the shared liability pool, meaning they will bear a proportionate share of the loss. This highlights the importance of understanding the risks associated with pooled tokens and the need for transparency in token issuance and backing.