Exploit Drains $4M from Terra Blockchain, ASTRO Hits All-Time Low
The Terra blockchain experienced a significant disruption on July 31, 2024, as operations were halted to address a major security exploit. The blockchain was paused at block height 11430400, and transactions have been suspended until further notice. According to an official update from Terra, the halt was necessary for validators to implement an emergency patch to rectify a suspected exploit affecting the network.
đź“ŁAttention Terra users: Please be advised that the chain will be halted shortly at block height 11430400 and transactions will not be processed during this time.
We will be working with the validators on Terra (phoenix-1) to apply an emergency patch thereafter to remediate a…
— Terra 🌍 Powered by LUNA 🌕 (@terra_money) July 31, 2024
Details of the Exploit
The exploit, identified as a reentrancy attack, resulted in substantial financial losses. Security firm Beosin reported that the breach led to the theft of approximately $4 million worth of tokens. This includes around 60 million Astroport (ASTRO) tokens, 3.5 million USD coins (USDC), 500,000 Tether (USDT), and 2.7 Bitcoins (BTC). The vulnerability targeted a known issue in the inter-blockchain communication (IBC) protocol, which had been disclosed earlier in April but reappeared in a subsequent upgrade in June.
Terra blockchain was exploited for ~60M $ASTRO, 3.5M $USDC, 500k $USDT, and 2.7 $BTC.
The attacker exploited a reentrancy vulnerability in the timeout callback of ibc-hooks. The vulnerability was disclosed in April this year:https://t.co/CY39X28KyEhttps://t.co/hY9xA40hbJ
The immediate aftermath of the attack saw a dramatic fall in the value of the ASTRO token. The token’s price plummeted by over 60%, dropping from approximately $0.045 to a low of $0.01313. Despite some recovery, the token remains at an all-time low, reflecting ongoing market volatility and investor concern.
Very sad to heard about the exploit on the $ASTRO token this morning.
Fortunately the team are chads and this will bounce back stronger.
Got fortunate to accumulate a solid chunk pre the halting of the chain.
I now have extra heavy $ASTRO bags, and not mad about it .
— Simon Chadwick 👨‍🚀 (@simonch00) July 31, 2024
Terra’s Recent Developments
The exploit comes amid broader challenges for Terra. Earlier in June, Terraform Labs settled with the U.S. Securities and Exchange Commission (SEC) for $4.47 billion, related to the collapse of the Terra ecosystem. The settlement included substantial fines and penalties, with former CEODo Kwon held personally liable for a significant portion of the settlement.
Additionally, on July 19, Terra announced the reopening of the Shuttle Bridge so that users could redeem their assets. This bridge was set to close permanently after 30 days, underscoring the ongoing efforts to manage and mitigate the fallout from the ecosystem’s previous collapse.
Recovery and Future Steps
Following the halt, Terra resumed block production at around 4:19am UTC after validators, who hold over 67% of the network’s voting power, successfully updated their nodes to counteract the exploit. The network’s swift response has been crucial in mitigating further damage. However, the events underscore the ongoing risks and vulnerabilities within the blockchain space.
The Terra chain has resumed block production at approximately 4:19 AM UTC today and the emergency chain upgrade is now complete.
Transactions are now being processed, and users may resume normal activities.
Validators holding over 67% of the voting power on Terra have upgraded…
— Terra 🌍 Powered by LUNA 🌕 (@terra_money) July 31, 2024
Conclusion
The recent exploit on the Terra blockchain highlights the resilience and vulnerabilities inherent in blockchain technologies. As the network recovers from this incident, stakeholders will closely monitor the situation to prevent future breaches and restore stability.
