Cronos Stopped Producing Blocks After an Attacker Borrowed $75 Million From Tectonic

An attacker borrowed roughly $75 million out of Tectonic, the main lending market on the Crypto.com-affiliated Cronos network, and the network's validators responded by halting the chain entirely before restarting it, CoinDesk reported. Security researchers at DeFiHackLabs have since published a runnable proof-of-concept reproducing the attack, which they classify as a Mango Markets-style collateral price manipulation.

The method was cheap and well documented. TONIC, Tectonic's own token, carried about $1.34 million of liquidity and roughly $11,000 of daily trading volume. The attacker raised its price about 100-fold in around 20 minutes, deposited the repriced tokens as collateral at a 20% collateral factor, and borrowed harder assets against them. No contract was tricked into breaking its rules. The lending market read a price that a real market had produced, and lent against it. TRM Labs, which tracks illicit on-chain activity, says the number of price-manipulation attacks has reached an all-time high and puts the amount taken from Tectonic at $75 million.

Because Cronos stopped, most of the proceeds never left. Reporting on the incident puts the amount successfully moved out at roughly $6 million in ether, with the rest stranded on a network that was no longer settling transactions. Tectonic's total value locked fell from about $121.7 million on Aug. 26 to roughly $3 million.

A day later, Ontology's core team stopped block production on its own mainnet after a routine daily check flagged a potential security issue. The last block stood at 20,770,893, the team said no incident or asset loss had been confirmed, and it set no restart time. Bithumb and Upbit suspended deposits and withdrawals for ONT, ONG and MBL while the review ran.

Two chains used the same emergency measure within 48 hours. Halting limits losses, and it also settles a longstanding question. On both networks, a small enough set of coordinated operators can stop settlement for everyone. That is a protection for depositors and a problem for anyone who assumed the ledger would keep recording transactions no matter what happened.