Hassan Maishera
On Monday, the IoTeX team announced via X that IoTeX suffered an exploit on February 21, in which an attacker compromised a private key on its cross-chain bridge, ioTube, siphoning millions of dollars.
The attacker allegedly moved $4.4 million from the bridge. The team is now offering 10% white-hat bounty to the hacker or hackers in exchange for the voluntary return of funds within 48 hours.
IoTeX co-founder and CEO Raullen Chai said the team sent an onchain message offering not to pursue legal action or share identifying information with law enforcement if the remaining funds are returned.
The message states that exchange deposits have been flagged and frozen and offers a 10% bounty for the return of remaining funds.
Chai also said IoTeX is rolling out a new chain version, Mainnet v2.3.4, requiring node operators to upgrade. The update includes a default blacklist of malicious externally owned account (EOA) addresses.
IoTeX assured its community that the incident is “under control,” adding that its Layer 1 blockchain was not affected and that the breach was isolated to the Ethereum-side infrastructure of the bridge.
The team explained that the attack targeted the Ethereum side of the ioTube bridge through a sophisticated four-step chain:
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Validator Key Compromise: The owner account of the Validator contract on Ethereum was compromised, granting the attacker administrative control.
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Malicious Upgrade: The attacker used this access to upgrade the Validator contract to a malicious version that bypassed all signature and validation checks.
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Contract Takeover: With the validator layer subverted, the attacker took control of the MintPool (token minting) and TokenSafe (reserve assets).
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Asset Drainage: The attacker minted 410M CIOTX and drained approximately $4.4M in various tokens from the bridge reserves.
IoTeX's mission is to be a privacy-centric blockchain managing the entire information lifecycle of an Internet of Things (IoT) network, including data collection, transport, storage, and utilization. IOTX is up 2.7% today and is currently trading at $0.004429.
