Switchboard Oracle Halted on Four Blockchains Amid Compromised Key

On August 29, 2026, Switchboard, an oracle provider, halted its price feeds on four blockchains: Sui, Aptos, IOTA, and Movement. The decision was made after a compromised oracle key was suspected, which allowed an attacker to manipulate the price feed for IOTA, temporarily setting it at ten million US dollars.

The attacker used this manipulated price to mint around 4.94 million VUSD through the CDP protocol Virtue, backed by non-existent collateral. This led to the liquidation of 45 users and exchange addresses being frozen to slow down the outflow.

Full Sail, a decentralised trading venue on Sui, confirmed losses in its automated vaults and suspended deposits and withdrawals. The incident highlights the risk associated with algorithmically backed stablecoins and the importance of understanding how price feeds work.