Terra Blockchain Temporarily Halts Operations After $4 Million Exploit

Terra Blockchain recently halted its activities for a short time before starting up again, after a $4 million breach.  This sudden interruption was due to a reentrancy attack that took advantage of a known vulnerability. This led to the theft of assets in multiple tokens. The network had to shut down at block 11430400 to carry out an emergency patch.

After the blockchain stopped, the network started making blocks again, according to a tweet from Terra. Validators with more than 67% of the voting power on the blockchain fixed their nodes to protect against the problem.

The Exploit Led To The ASTRO Token Hitting Its Lowest Price Of $0.01314

According to Beosin, a blockchain security company, the attack took more than $4 million in tokens from bridged assets. This included about 60 million ASTRO tokens, $500,000 in USDT stablecoins, $3.5 million in USDC, and 2.7 BTC.

After the breach, Astroport’s ASTRO token fell to its lowest-ever price of $0.01314 and is currently at $0.0218, which is down more than 53% for the day. Terra’s LUNA token ended the day about 2.7% lower at $0.3944, after dropping to $0.385 right after the exploit.

This problem was first noticed a few months ago, and then it spread through the Cosmos system in April. Terra blockchain got an update in June, but it didn’t fix the problem. The co-founder of Sommelier Finance, Zaki Manian explained that this problem led to more exposure and eventually the recent attack.

The Exploit Occurred Two Years After A Crash That Affected The Crypto Industry

This attack happened a couple of years after the Terra network had a big crash, which made the whole crypto industry lose $2 trillion. But since then, Terra has made some big changes, like creating a new version of the Terra Classic network. Interestingly, Terraform Labs is still working through its bankruptcy and recently disclosed the date for creditors to send in their claims.

In June, Terraform Labs and Do Kwon, its former Chief Executive Officer, decided to pay about $4.5 billion in civil penalties and recovery to the SEC. The agreement was made with the US regulator, as explained in a court document. Also, Terraform Labs and Kwon were forever stopped from buying and marketing crypto securities, including cryptocurrencies in the Terra ecosystem.

In another event, the decision to send Do Kwon to either South Korea or the US was taken to the High Court in May. This happened after the Montenegro Court of Appeals approved an appeal by Kwon and his lawyers.