Sandbox Bridging System Breached, $49 Billion in Unbacked SAND Tokens Minted

The Sandbox's bridging system was compromised, allowing an attacker to mint $49 billion in unbacked SAND tokens on Base and BNB Smart Chain. However, this figure is inflated as it represents face-value tokens created without backing, far exceeding the liquidity available for sale.

Independent tracking estimates that around 14.75 million SAND, valued at approximately $675,000, left legitimate bridge reserves before the response. Additionally, around 79.74 ETH was converted during the attack, making this the part of the event with an actual economic cost.

The exploit occurred through the hijacking of LayerZero delegate permissions tied to the SAND Omnichain Fungible Token (OFT) on Base via an approveAndCall route. This allowed the attacker to mint SAND without normal backing on Ethereum, severing the relationship between tokens created on one network and their matching counterparts on another.

The Sandbox has halted bridging operations to and from Base and BNB Smart Chain, warning users not to buy, sell, or trade affected token balances due to compromised liquidity. The company is taking a snapshot of pre-incident data and preparing compensation for users impacted by the affected liquidity pools.