Switchboard Move Oracle Compromise Sparks Liquidations Across DeFi Networks

A suspected compromise in Switchboard's Move oracle implementation has triggered liquidations and frozen vaults across multiple DeFi networks. The incident affected applications on Aptos, Sui, IOTA, Movement, Virtue, Full Sail, and Volo.

Switchboard halted its deployments on these platforms after reports of a potential compromise. At least three applications reported losses or freezes: Full Sail confirmed vault losses, while Virtue experienced 47 liquidations affecting 45 users after an attacker manipulated its IOTA price feed.

Virtue said the attacker gained control of the signing keys used by all 14 oracles on Switchboard's IOTA mainnet queue and pushed IOTA's reported price to $10 million. The attacker then deposited 1 IOTA and minted about 4.94 million VUSD, according to Virtue.

Virtue froze borrowing, repayment, deposits, withdrawals, liquidations, and flash loans while remediation was pending. It warned that VUSD was materially undercollateralized during the incident.