The Terra blockchain has abruptly halted its operations at block height 11430400, suspending all user transactions in response to a suspected security breach.
Terra’s official communication on X revealed that this emergency measure will help mitigate the suspected exploit.
📣Attention 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
According to the X post, the Terra team is coordinating with Terra (Phoenix-1) validators to implement the necessary fixes during this period of inactivity.
Update on Terra Blockchain Exploit
Details of the exploit surfaced through Cyvers Alerts’ X post. According to the post, the culprits got away with approximately 3.5 million USD worth of tokens, 500,000 Tether tokens, 60 million Astroport (ASTRO) tokens, and 2.7 Bitcoin tokens.
This revelation has significantly impacted the market, leading to a sharp decline in the value of the Astro token. By 3:00 am UTC on Wednesday, the price of Astro had plunged from around $0.045 to a low of $0.01313, reflecting a loss of over 60%.
Notably, before the exploit was announced, the stolen Astro tokens were valued at approximately $2.7 million. With the Astro token price stabilizing around $0.018 after the breach, the value of the stolen tokens has decreased to about $1.08 million.
Although the stolen tokens represent only 5.5% of the total supply, the sell-off has driven Astroport to a new all-time low. The incident has, in turn, worsened the challenges facing the decentralized marketplace.
It has also compounded the difficulties already confronting Terraform Labs. On June 12, the company agreed to a substantial $4.47 billion settlement with the United States Securities and Exchange Commission (SEC).
The settlement included a $420 million civil penalty, $3.6 billion in disgorgement fines, and nearly $467 million in prejudgment interest.
Additionally, former CEO Do Kwon will pay around $204 million in penalties for his involvement in the Terra ecosystem collapse, causing $40 billion in investor losses.
Shuttle Bridge Reopening Amid Challenges
Amid these challenges, Terraform Labs made a notable announcement on July 19 regarding reopening the Shuttle Bridge.
1/ Dear Terra community,
We would like to inform you about a recent bankruptcy court order in TFL’s chapter 11 case authorizing TFL to do the following: 1) Reopen the Shuttle bridge for the redemption of wrapped assets on Terra Classic; 2) Undelegate & burn the 150M LUNA…
— Terra 🌍 Powered by LUNA 🌕 (@terra_money) July 19, 2024
This move aims to make the recovery of users’ sealed assets on the Terra Classic blockchain possible. It comes on the heels of the firm’s Chapter 11 case bankruptcy court order.
The order permits the undelegation and burning of 150 million LUNA tokens. As a result, users have up to 30 days to redeem the sealed assets using the Shuttle Bridge wallet.
Meanwhile, experts consider the recent theft incident a common security flaw that lets attackers repeatedly interact with a network to drain its assets.
In this case, they took advantage of a flaw in the ibc-hooks’ timeout callback. This breach has intensified security worries within the Terra community and among its developers, prompting calls for enhanced security protocols.
Such exploits highlight the ongoing security challenges in blockchain technology. Despite efforts within the crypto sector to establish strong defenses, vulnerabilities persist, allowing attackers to find and exploit them.
Through the emergency operation halt, the Terra team is dedicated to strengthening network security and rebuilding user confidence.
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